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 (flight 482) is as follows: Ticket revenue (105 seats 40% occupancy x $65 ticket price) Variable expenses ($13.00 per person) $2,730 100% 546 20 Contribution margin 2184 8096 Flight expenses 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 assistants at destination $ 340 690 530 195 150 700 190 70 2,865 (681) Total flight expenses Net operating loss