Profits have been decreasing for several yoars at Pegasus Alrines In an effort to improve the company's performance, the company is thinkdng about dropping several fights that appear to be unprofitable. A typical income statement for one round-trtp of one such flight fight 482) is as follows Ticket revenme (110 seats 401 oceupancy $35 sicket price) Vaziable expennes ($15.00 pex pernon) Contribation sargin $ 3,300 100.0 46010 20 2, 640 Flight expenses: Salaries, Flight crew Flight promotiona Depreeiation of aircraft Fuel for aircraft $320 730 540 170 180 Salaries, flight assistants Baggage loading and flight preparasion Overnight costs For flight crew and ansistanth 740 : 190 at destination 60 Total flight eapenses Jet operating Jess 290) The following addtional Informaton is available about fight 482 a Members of the fight crew are pald fixed anual salaries. whereas the night essistants are paid basad on the number of round tripe they compiete b One-third ot the tability Insurance is a spectal charge assessed apalnst flight 482 because in the optnion of the Insurence company, the dostination 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 alocation of ground crews salanes and deprectation of ground equipment Dropping flight 482 would have no effect on the company's total baggage loading and flight preparation oxponses. f t ight 482% dropped Pegasus Artnes has no aumonzator at present to replace it with anotne flight e Aircraft depreciation ie due enurely to obsolescence Doprectation que to weor and rear s negilgible t Dropping figh: 482 would not atlow Pagasus Arinen to reduce the humber of aircraft in ts feet or the number of fght crow on ta payroil