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apter 11 H Help Save Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company's performance, the company is thinking about dropping several flights that appear to be unprofitable. 0 oints A typical income statement for one round-trip of one such flight (flight 482) is as follows: 20twa4) Ticket revenue (190 seats x 40% occupancy x $250 ticket price) Variable expenses ($19.00 per person) Contribution margin Flight expenses: 19,000 100.0% 1,444 7.6 17,556 92.4% s 1,700 Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for flight crew and assistants at 1,700 s,880 1, 300 1,750 destination Total flight expenses 18,238 s (674) 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 liablity insurance is a special charge assessed against flight 482 becouse in the opinion of the insurance compary Prev 1 of 2 Score answer> tion.com/flow/con Help Sav Chapter 11 H 1 (674) 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 20 points they c of the lilability insurance is a special charge assessed against flight 482 because in the opinion of the insurance company a high-risk" area. The remaining two-thirds would be unaffected by decision to drop flght 482 01:40:03 c. The ba loading and flight preparation expense is an allo 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 fight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number payroll. 1. What is the financial advantage (disadvantage) of discontinuing flight 482? Type here to search