Overnight costs for flight crew and ts at destination Total ight expenses Net operating loss 60 2,800 (758) The following additional information is available about flight 482 a. Members of the flight crew are paid foxed 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 light 482 because in the opinion of the insurance compary, the destnation 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 light preparation expense is an allocation of ground crews' salaries and depreclation of ground equipment. Dropping flight 482 would have no effect on the company's total baggage loading and fight preparation expenses d. If flight 482 is dropped, Pegasus Airtines has no authorization at present to replace i with another flight e. Aircraft depreciation is due entirely to obsolescence. Depreciasion due to wear and tear is negligible. . Dropping fight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of fight crew on its payrol. Required: 1. Prepare an analysis showing what impact dropping flight 482 would have on the airline's profts. (Any losses/ reductions should be indicated by a minus sign. Contribution margin lost id the tour is discontinued Less flight costs that can be avoided if the flight is discontinued: Flight promotion Fuel for aircraft Liability insurance Salaries, flight assistants Overnight costs for flight crew and assistants Net increase (decrease) in profits if the flight is discontinued References eBook &Resources Overnight costs for flight crew and ts at destination Total ight expenses Net operating loss 60 2,800 (758) The following additional information is available about flight 482 a. Members of the flight crew are paid foxed 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 light 482 because in the opinion of the insurance compary, the destnation 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 light preparation expense is an allocation of ground crews' salaries and depreclation of ground equipment. Dropping flight 482 would have no effect on the company's total baggage loading and fight preparation expenses d. If flight 482 is dropped, Pegasus Airtines has no authorization at present to replace i with another flight e. Aircraft depreciation is due entirely to obsolescence. Depreciasion due to wear and tear is negligible. . Dropping fight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of fight crew on its payrol. Required: 1. Prepare an analysis showing what impact dropping flight 482 would have on the airline's profts. (Any losses/ reductions should be indicated by a minus sign. Contribution margin lost id the tour is discontinued Less flight costs that can be avoided if the flight is discontinued: Flight promotion Fuel for aircraft Liability insurance Salaries, flight assistants Overnight costs for flight crew and assistants Net increase (decrease) in profits if the flight is discontinued References eBook &Resources
