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In an effort to increase profits, Pegasus Airlines is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one

In an effort to increase profits, Pegasus Airlines is thinking about dropping several flights that appear to be unprofitable.
A typical income statement for one round-trip of one such flight (filight 482) is as follows:
The following additional information is avallable about flight 482:
a. Members of the filight crew are paid flxed annual salarles, whereas the flight assistants are paid based on the number
of round trips they complete.
b. One-third of the llability insurance is a speclal charge assessed against flight 482 because, in the opinion of the
Insurance company, the destination of the filight is in a "high-rlsk" area. The remaining two-thirds would be unaffected
by a decision to drop filight 482.
c. The baggage loading and flight preparation expense is an allocation of ground crews' salarles and depreclation of
ground equipment. Dropping flight 482 would have no effect on these expenses.
d. If flight 482 is dropped, Pegasus Alrlines will not replace it with another flight.
e. Wear and tear on the alrcraft caused by this filight is negligible.
t. Dropping flight 482 would not allow Pegasus Airlines to reduce the number of alrcraft in its fleet or the number of
flight crew on its payroll.
Required:
What is the financlal advantage (disadvantage) of discontinuing flight 482?
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