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 (ight 482) is as follows: 15,400 1,260 14.160 100.00 8.2 91.80 Ticket revence (175 watu 408 occupancy 220 ticket price) Variable expe (818.00 per person Contribution margin Tight ex Salaries, flight crew right promotion Depreciation of aircraft Fuel for Sirerat Liability Insurance Salaries, flight stats Baggage loading and flight preparation Overnight out for flight crew and assistante et destisation Total flight expenses Net operating lous $ 1.600 790 1.650 5,600 5,100 1,500 1,750 700 10,690 574,550) 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 b. One-third of the liability Insurance is a special charge assessed against fight 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 flight 482 would have no effect on the company's total baggage loading and flight preparation expenses. d. If flight 4B2 is dropped, Pegasus Airlines has no authorization at present to replace it with another flight. e. Alrcraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is negligible. 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: 1. What is the financial advantage (disadvantage) of discontinuing flight 482? Financial (disadvantage) (2.618)