Hey need some help with this question...

Problem 12-21 Dropping or Retaining a flight.

So the Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company's performance, consideration is being given to dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight(flight 482) is shown below.

Ticket revenue(175 = seat capacity x 40% occupancy x $200 ticket price per person).......................................................................................................................................$14,000. 100%

Variable Expenses($15 per person).............................................................................$1,050. 7.5

Contribution Margin.............................................................................................................$12,950. 92.5

Flight Expenses:

Salaries, flight crew.............................................................................................................1,800

Flight Promotion......................................................................................................................750

Depreciation of aircraft......................................................................................................1,550

Fuel for Aircraft......................................................................................................................5,800

Liability Insurance.................................................................................................................4,200

Salaries,Flight assistants....................................................................................................1,500

Bagage loading and flight preparation.........................................................................1,700

Overnight costs for flight crew at destination.............................................................300

Total flight expenses.................................................................................................................17,600

Operating Loss..........................................................................................................................$(4,650)

Additional Info.

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 grounds crews' salaries and depreciation of grounds 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.

This is what is required

1. Please help me prepare an analysis showing what impact dropping flight 482 would have on the airline's profits.
2. The airline's scheduling officer has been criticized because only about 50% of the seats on pegasus's flights are being filled compared to and industry average of 60%. The scheduling officer has explained that Pegasus's average seat occupancy could be improved considerably by eliminating about 10% of its flights, but that doing so would reduce profits. Explain how this could happen.