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 such flight (Flight 482) follows: Ticket revenue (175 seats x 80% occupancy x $300 ticket price) Less: Variable expenses ($24 per person) Contribution margin Less: Flight expenses: Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight attendants Baggage loading and flight preparation Overnight costs for flight crew and attendants at destination Total flight expenses Net operating loss The following additional information is available about Flight 482:

Profits have been decieasing for several years at Pegasus Airlines, in an effort to improve the companys performance, consideration is being given to dropping several fights that appear to be unprofitable A typical income statement for one such flight (Fight 482) follows. The following additional information is available about Flight 482 . The folowng oddinonal informaticn is avilable about Fight 482 a Members of the flight crew are paid fixed annual salaries, whereas the flight antendants are pad by the flight b One:third of the labuly insurance is a special charge assessed against Flight 482 because, in the opinion of the insirance complay, the destination is in a Fightrik area The iemaining two-thirds would be uraffected by a decision to drop Flight 482 c. The beggoge loading and fight preparation expense is an alocution of ground crew's salarkes and deprechation of ground: payioll Aequired: 1. Prepare an analysis showing what impact dropping Flight 482 would have on the ahfine s profits (Do not roupd intarmediats colculotions. Negasive smounts should be indicared wish s minus sion)