Profits have been decreasing for several years at performance, consideration is being given to dropping several lights that appear to be unprofitable A typical income statement for one round-trip of one such fight (light 482) Is as follows Ticket revenue (110 seats 40% occupancy $60 ticketprice) Variable expenses ($14.00 per person) $2,640 100% 616 23.3 Contribution margin 2,024 767% 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 $ 350 750 400 190 180 740 175 70 2,855 $ (831) Total flight expenses Net operating loss 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 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 4 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 gage loading and flight preparation expenses d. If fight 482 1s dropped. Pegasus Airlines has no authorization at prosent to replace it with another flight e Aircraft depreciation is due entirely to obsolescence Depreclation due to wear and tear is negligble f Dropping flight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its feet or the number of fliaht crew on its pavroll