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A typical income statement for one round-trip of one such flight (flight 482) is as follows Ticket revenue (175 seats x 40% occupancy x 200
A typical income statement for one round-trip of one such flight (flight 482) is as follows Ticket revenue (175 seats x 40% occupancy x 200 $14,000 1,400 12,600 106.0% ticket price) Variable expenses ($20.00 per person) Contribution margin Flight expenses: 10 98% alaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for flight crew and assistants $1,600 790 1,700 5,200 4,500 1,200 1,900 700 17,590 at destination Total flight expenses Net operating loss $ (4,990) The following additional information is available about flight 482: a. Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trip they complete b. One-third of the liability insurance is a special charge assessed against flight 482 because in the opinion of the insurance compar the destination of the flight is in a high-risk" area. The remaining two-thirds would be unaffected by a decision to drop flight 482. C. The baggage loading and flight preparation expense is an allocation of ground crews, salaries and depreciation of ground
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