Futuristic Airlines hasbeen experiencing a decreasein profitability over the last few years. In an effort to improve the company's performance, unprofitable flights are being assessed to determine if they should be discontinued.

A typical income statement of a relevant flight (Flight 672) follows:

Ticket revenue (125 seats 80% occupancy $450 ticket price) $45,000 100.0%

Less: Variable expenses ($36 per person) 3,600 8.0

Contribution margin 41,400 92.0%

Less: Flight expenses:

Salaries, flight crew 5,600

Flight promotion 2,250

Depreciation of aircraft 4,500

Fuel for aircraft 21,600

Liability insurance 13,500

Salaries, flight attendants 1,550

Baggage loading and flight preparation 5,400

Overnight costs for flight crew and attendants at destination 900

Total flight expenses 55,300

Net operating loss$ (13,900)

The following additional information is available about Flight 672:

1. Flight crew members are paid fixed annual salaries, whereas the flight attendants are paid by the flight.
2. One-third of the liability insurance is a special charge assessed against Flight 672 because, in the opinion of the insurance company, the destination is in a high-risk area. The remaining two-thirds would be unaffected by a decision to drop Flight 672.
3. The baggage loading and flight preparation expense is an allocation of ground crew's salaries and depreciation of ground equipment. Dropping Flight 672 would have no effect on the company's total baggage loading and flight preparation expenses.
4. If Flight 672 is dropped, Futuristic Airlines has no authorization at present to replace it with another flight.
5. Depreciation of aircraft is due entirely to obsolescence. Depreciation due to wear and tear is negligible.
6. Dropping Flight 672 would not allow Futuristic Airlines to reduce the number of aircraft in its fleet or the number of flight crew on its payroll.

1.Prepare the analysis showing what impact dropping Flight 672would have on the airline's profits.(Do not round intermediate calculations. Negative amounts should be indicated with a minus sign.)

Contribution margin lost if the flight is discontinued:

flight cost that can be avoided if the flight is discontinued:

flight promotion

fuel for aircraft

liability insurances

salaries, flight assistant

overnight costs for flight crew and assistants

net increase in profits if the flight discontinued