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. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (185 seats x 40t occupancyx $220 ticket price) Variable expenses ($19.00 per person) Contribution margin Flight expenses: $16,280 1,406 100.0% 8-6 91.4% 14,874 Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for flight crew and $1,700 750 1,500 5,700 4,500 1,500 1,750 500 assistants at destination 17,900 - Total flight expenses Net operating loss $13,026) 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. the dest equioment. Dropping flight 482 would have no effect on the company's total baggage loading and flight prepara tination of the flight is in a "high-risk" area. The remaining two-thirds would be unaffected by a decision to drop flight 482. loading and flight preparation expense is an allocation of ground crews' salaries and depreciation of ground b. One-third of the liability insurance is a special charge assessed against flight 482 because in the opinion of the insurance company c. The baggage l The following additional information is available about flight 482: nts 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. the destination of the flight is in a Thigh-risk" area. The remaining two-thirds would be unaffected by a decision to drop flight 482. c. The baggage loading and flight preparation expense is an allocation of ground crews' salaries and depreciation of ground eBook Print 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 e. Aircraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is ne to reduce the number of aircraft in its fieet or the number of flight crew on its t. Dropping flight 482 would not allow Pegasus Airlines payroll. Required: 1. What is the financial advantage (disadvantage) of discontinuing flight 4827