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I can't get the answer correct. idk why. Any help ork-Google Chrome e ezto. px Profits have been decreasing for several years at Pegasus Airlines.
I can't get the answer correct. idk why. Any help
ork-Google Chrome e ezto. px 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 lights that appear to be unproftable. A typical income statement for one such flight (Flight 482) follows Ticket revenue (175 seats 80% occupancyxS600 ticket price) S 84,000 100.0% 8.0 6.720 80 Less. Variable expenses (548 per person) Contribution margin Less: Flight expenses , 77280 920% Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight attendants Baggage loading and flight preparation Overnight costs for flight crew and attendants at destination 1680 10,500 4.200 8.400 40,300 25,200 2,900 0 100 Total flight expenses Net operating loss (26 000) The following additional information is available about Flight 482 a Members of the flight crew are paid fixed annual salaries, whereas the flight attendants are paid by the fight b One-third of the liability insurance is a special charge assessed against Flight 482 because, in the opinion c The baggage loading and flight preparation expense is an allocation of ground crews salaries and d if Flight 482 is dropped Pegasus Airlines has no authorization at present to replace it with another flight 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 482 depreciation of ground equipment Dropping Flight 432 would have no effect on the company's total baggage loading and flight preparation expenses e Depreciation of airoraft 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. Prepare an analysis showing what impact dropping Flght 482 would have on the arline s profits (Do not round intermediate calculations. Nogative amounts should be indicated with a minus sign.J 3 Answer is complete but not entirely correct. Contribution margin lost if the Eight is discontinued 77 280 3 Flight costs that can be avoided i the light is discontinued Overnight costs for flght crew and assistants Flight promotion Salaries flight assistants Fuel for aircra Liability insurance 680 4.200 0 C2.900 0 40 300 S 400 S57 480 17200 Net decrease in profits if the flight is discontinuedeStep by Step Solution
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