Frofits have been decreacing for several year at ArCanata. is an ettoct to impoent the vemeany's the following addiconat information in malable for fllight 250 : - Members of the fiedt erew are paid fred annual salaries, wheren the fight antendurs are owid by the fight - On tird of the liatrilty insurance is a specoel tharee arversed aginen flytr 2 So benane in the oginion of the incurance comgany, the destinatoo is in a high rid asu. The minaining tao-thirs woild be unaffected by the decision to drop fiyht ast. - The bageate tading and fieht preparacen experse is an allocaton of gound crews at areet and totalbacrege loadint and fietn pre. fopemer - If fight 250 is dropped, ArCande tas ne authoriation at presert to neplace with andther fight - Depreciatios of airctaft is due entirely to obooleser. Depreciation due an wean atd trar in negligble. - Droppine figte 250 would not allow Aircitada to redace the number of ancult in in flret or the number elflight crew on its puynot. Required: 21) The airlike's schedaling officer has been orticiend because enly about sess of the teass on ArCanada's flights ave being fllied, wempuoed with an average of uOsi tor the inthictry, the Explain how this could happen. - The baggage loading and flight preparation expense is an allocation of ground crews salaries and depreciation of ground equipment. Dropping Flight 250 would have no effect on the company's total baggage loading and flight pre. Expenses - If flight 250 is dropped, AirCanda has no authorization at present to replace with another flight - Depreciation of aircraft is due entirely to obsolesce. Depreciation due to wear and tear is negligible. - Dropping flight 250 would not allow AirCanada 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 Flight 250 would have in the airline's profits 2) The airline's scheduling officer has been criticized because only about 50% of the seats on AirCanada's flights are being filled, compared with an average of 60% for the industry. The scheduling officer has explained that AirCanada's average seat occupancy could be improved considerable by eliminating about 10% of the flights but that doing so would reduce profits. Explain how this could happen. Profits have been decreasing for several year at AirCanada. 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 on such flight (Flight 250) is a follow's: The following additional information is available for Flight 250 : - Members of the flight crew are paid fixed annual salaries, whereas the flight attendants are paid by the flight - On-third of the liability insurance is a special charge assessed against Flight 250 because in the opinion of the insurance company, the destination is in a high-risk area. The remaining two-third would be unaffected by the decision to drop flight 250. Frofits have been decreacing for several year at ArCanata. is an ettoct to impoent the vemeany's the following addiconat information in malable for fllight 250 : - Members of the fiedt erew are paid fred annual salaries, wheren the fight antendurs are owid by the fight - On tird of the liatrilty insurance is a specoel tharee arversed aginen flytr 2 So benane in the oginion of the incurance comgany, the destinatoo is in a high rid asu. The minaining tao-thirs woild be unaffected by the decision to drop fiyht ast. - The bageate tading and fieht preparacen experse is an allocaton of gound crews at areet and totalbacrege loadint and fietn pre. fopemer - If fight 250 is dropped, ArCande tas ne authoriation at presert to neplace with andther fight - Depreciatios of airctaft is due entirely to obooleser. Depreciation due an wean atd trar in negligble. - Droppine figte 250 would not allow Aircitada to redace the number of ancult in in flret or the number elflight crew on its puynot. Required: 21) The airlike's schedaling officer has been orticiend because enly about sess of the teass on ArCanada's flights ave being fllied, wempuoed with an average of uOsi tor the inthictry, the Explain how this could happen. - The baggage loading and flight preparation expense is an allocation of ground crews salaries and depreciation of ground equipment. Dropping Flight 250 would have no effect on the company's total baggage loading and flight pre. Expenses - If flight 250 is dropped, AirCanda has no authorization at present to replace with another flight - Depreciation of aircraft is due entirely to obsolesce. Depreciation due to wear and tear is negligible. - Dropping flight 250 would not allow AirCanada 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 Flight 250 would have in the airline's profits 2) The airline's scheduling officer has been criticized because only about 50% of the seats on AirCanada's flights are being filled, compared with an average of 60% for the industry. The scheduling officer has explained that AirCanada's average seat occupancy could be improved considerable by eliminating about 10% of the flights but that doing so would reduce profits. Explain how this could happen. Profits have been decreasing for several year at AirCanada. 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 on such flight (Flight 250) is a follow's: The following additional information is available for Flight 250 : - Members of the flight crew are paid fixed annual salaries, whereas the flight attendants are paid by the flight - On-third of the liability insurance is a special charge assessed against Flight 250 because in the opinion of the insurance company, the destination is in a high-risk area. The remaining two-third would be unaffected by the decision to drop flight 250
