Profits tive been decreasing for several yeursat Pegosus Airines in an etfort to impiove the conipanys performance, considerabion is being given to diopping several fightas that appear to be unprofitable. A typical income statemeat for one such fingt (Fight 488 ) folfows: Hwe following additional information is evoloble about Flyht 482 a. Members of the flight ciew are paid faed annual solaries wheress the fight attendants are paid by the flight b. One thind of the liablity insurance is a special charge assesped against Flight 482 because, in the opinion of the invurance company, the destination is in a hlph-risk area. The remaining two-thitas would be uratfected by a decisian fo drop Filght 482 . c. The baggage loading and fight pleparation expense is an allocaton of ground crew's solaries and deptectation of ground equipment Dropping Fight 482 would hove no effect on the compomys totar bognago loading and hight preceration expeenses. d. If Fight 482 is dropged, Pegases Alitines has no buthortzation at present to replace it weth another fight e. Depreciation of aircrat is due entirely to obrolescence. Depteslation due to wear and lear is neghigble, payiot. Required: 1. Prepare an anolysis-showing what impoct dropping Flight 482 would have on the audine's prots: (Do not reund intermedinte colculations. Negotive omounti should be indicoted with a minus sion.) Profits tive been decreasing for several yeursat Pegosus Airines in an etfort to impiove the conipanys performance, considerabion is being given to diopping several fightas that appear to be unprofitable. A typical income statemeat for one such fingt (Fight 488 ) folfows: Hwe following additional information is evoloble about Flyht 482 a. Members of the flight ciew are paid faed annual solaries wheress the fight attendants are paid by the flight b. One thind of the liablity insurance is a special charge assesped against Flight 482 because, in the opinion of the invurance company, the destination is in a hlph-risk area. The remaining two-thitas would be uratfected by a decisian fo drop Filght 482 . c. The baggage loading and fight pleparation expense is an allocaton of ground crew's solaries and deptectation of ground equipment Dropping Fight 482 would hove no effect on the compomys totar bognago loading and hight preceration expeenses. d. If Fight 482 is dropged, Pegases Alitines has no buthortzation at present to replace it weth another fight e. Depreciation of aircrat is due entirely to obrolescence. Depteslation due to wear and lear is neghigble, payiot. Required: 1. Prepare an anolysis-showing what impoct dropping Flight 482 would have on the audine's prots: (Do not reund intermedinte colculations. Negotive omounti should be indicoted with a minus sion.)
