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Profits have been decreasing for teveral years at Pegasus Airlines in an effort to improve the company's performance, the company is thinking about dropping several

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Profits have been decreasing for teveral 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 fight (flight 482) is as follows Ticket revenue (190 seats 408 Occupancy 5230 ticket price) $ 17,450 100.0% Variable expenses (517.00 per person) 22.4 Contribution margin 16,113 Flight expenses Salaries, Flight crew $ 1,600 Flight promotion 500 Depreciation of aircraft 1,700 Fuel for aircraft 5,600 Llity Insurance 5,100 Salaries, Flight assistants 1,400 Bacoge loading and flight preparation 1,500 Overnight costs for fight crew and assistants at destination Total night expenses het operating loss 5 (2,612) The following additional information is available about fight 482 Members of the flight crew are paid fixed annual salarieswhereas the light tos are paid based on the number of round tips they complete b. One third of the liability insurance is a special charge assessed against fight 482 because in the opinion of the trance company the destination of the flight is in a high risk area. The remaining two this would be unaffected by a decision to drop fight 482 c. The baggage loading and night preparation expenses on allocation of ground crews and depreciation of ground equipment. Dropping flight 482 would have no effect on the company's total baggage loading and fight preparation expenses da fight 482 is dropped, Pegasus Airlines has no authortation at present to replace with another fight e Aircraft depreciation is due entirely to obsolescence Depreciation due to wear and tea is neglige Dropping flight 482 would not allow Pegasus Aries to reduce the number of craft or the sumber of flight crew on payro Required: What is the financial advantage (disadvantage of discontinuing flight 4827 Financial advantage Financial (disadvantage)

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