Help SER Check 1 A typical income statement for one round-trip of one such flight (tlight 482) Is as follows: $ 18,240 20 points 180.00 7.9 92.11 16,796 Ticket revenue (190 seats x 40 occupancy $240 ticket price) Variable expenses ($19.00 per person) Contribution margin Flight expenses: Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for fight crew and assistants at destination Total flight expenses Net operating loss $ 1,700 880 1,750 5,700 4,500 1,300 Book 1.800 Print 600 18. 150 $ 1,354) References 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 trips they complete b. One-third of the liability insurance is a special charge assessed against flight 482 because in the opinion of the insurance company, 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 equipment Dropping flight 482 would have no effect on the company's total baggage loading and flight preparation expenses d. If flight 482 is dropped, Pegasus Airlines has no authorization at present to replace it with another flight e. Aircraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is negligible. f Dropping flight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of flight crew on its payroll Required: 1. What is the financial advantage (disadvantage) of discontinuing flight 482? 1,354 Financial (disadvantage) Prey 1 of 2 Next > Variable manufacturing overhead cost Fixed manufacturing overhead cost per month 254 of direct labor cost Production supervisor Depreciation of sixing equipment $ 3,200 $ 1.500 The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is special purpose equipment acquired specifically to produce the silver polish. It can produce up to 14.500 jars of polish per month. Its reale value is negligible and it does not wear out through use. Advertising costs for the silver pollsh total $3,800 per month. Variable selling costs associated with the silver polish are 5% of sales Due to a recent decline in the demand for silver pollsh, the company is wondering whether its continued production is advisable. The sales manager feels that it would be more profitable to sell all of the Grit 337 as a cleaning powdet. Required: 1. How much incremental revenue does the company earn per jar of polish by further processing Grit 337 rather than seling it as a cleaning powder? (Round your answer to 2 decimal places.) 2. How much incremental contribution margin does the company car per jar of polish by further processing Gt 337 rather than selling it as a cleaning powder? (Round your intermediate calculations and final answer to 2 decimal places.) 3. How many Jars of silver polish must be sold each month to exactly offset the avoidable foxed costs incurred to produce and sell the polish? (Round your intermediate calculations to 2 decimal places.) 4. If the company sells 8,300 jars of polish, what is the financial advantage (disadvagtage) of choosing to further process Gm 337 rather than selling is as a cleaning powder? (Enter any disadvantages as a negatkre value. Round your intermediate calculations to 2 decimal places.) 5. If the company sells 10,700 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling is as a cleaning powder? (Enter any disadvantages as a negative value. Round your intermediate calculations to 2 decimal places.) perar perja per month 1. Incremental revenue 2. Incremental contribution margin 3. Number of jars that must be sold 4. Financial advantage (disadvantage) 5. Financial advantage (disadvantage)