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 flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (fight 482 is as follows 2,860 Ticket revenue (110 seats x 40% occupancy x $65 ticket price) 100.0% Variable expenses ($14.00 per person) 616 21.5% (rounded 78.5% (rounded) 2,244 Contribution margin Flight expenses Salaries, flight crew 330 650 Flight promotion Depreciation of aircraft 370 Fuel for aircraft 75 240 Liability insurance Salaries, flight assistants 740 Baggage loading and flight preparation 85 80 Overnight costs for flight crew and assistants at destination 2.770 Total flight expenses S 526 Net operating loss The following additional information is available about flight 482: a. Members of the fight crew are paid fixed annual salaries, whereas the fight 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 flight 482 because in the opinion of the insurance company, the destination 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 flight preparation expense is an allocation of ground crews' salaries and depreciation of ground equipment. Dropping fight 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 it with another flight. e. Aircraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is negligible f. Dropping flight 482 would not allow asus Airlines to reduce the number of aircraft in its fleet or the number of fight crew on its payroll