Prolits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company's performance, considetition is being given to dropping several figitis that appear to be unproftable. A typical income statement for one such flight (Flight 482 ) follows: The folsawing additionat informotion is avaisble about Flight 482 : a. Members of the fight crew are paid fixed annual salacies, whereas the fight attendants are paid by the fight b. One-third of the tablaty insurance is a speciol charge assessed agoinat flight 412 becaise, in the coinion of the insuance compary, the destnation is in a high-isk orea. The temaing two-thirds would be unatlected by a decisfon to drop fight saz? c. The tagope losding and figh preparation experise is an aitocation of ground crew's salaries and depreciation of ground ecuipment. Dropping Fight as2 woud have no effect on the company's total bsggage losding and fight preparation expensec. d. If Faght 482 is dropped. Pegasus Alines has no wathorization at present to replace a with another fight. 4. Depreclation of aircest is deve entirely to cbsolescence. Deperciation due to weac and teat is negificie. f. Dropping Fight 482 would not aliow Pegasis Airthes to reduce the number of arciaf in the teet or the number of fight crew on its peyroit Aequiredi 1. Prepare an analysis shomeng what impact dropping Fight 482 would hove on the ailine s profits. (Do not round intermediate coleufations. Negotive ampunts sheuld be indicated with a minus signt The following additional information is available about Flight 482 : a. Members of the flight crew are paid fixed annual salaries, whereas the figit attendants are paid by the fight. b. One-third of the liability insurance is a special charge assessed against Filight 482 because, in the opinien of the insurance company, the destination is in a high-risk area. The remaining two-thirds would be unaffected by a decision to drop Fight 482 . E. The boggoge loadinig and flight preporation expense is an allocation of ground crew's salaries and depreciation of ground equipment. Dropping Flight 482 would hove no effect on the company's total baggage loading and fight preparafion expesses. d. If Flight 482 is dropped, Pegasus Aitines has no asthorization at present to replace it with ancther ffight. e. Depreciation of aircraft is due entitely to obsolescence. Depreciation due to wear and tear is negig ble. f. Dropping Flight 482 would not allow Pegasus Airlines to reduce the number of airctat in its fleet of the number of tight crew on its payroll. Required: 1. Prepare an analysis showing what impact dropping Fight 482 would heve on the anind's profits. (Do not round inteimediate calculations. Negative amounts should be indicated with a minus sign ) 2. This pert of the quest on is not part of yout Connect asi-gnment
