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Problem 12-21 Dropping or Retaining a Flight [LO12-2] Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company's performance the companys thinking about dropping several flights that appear to be unprofitable A typical income statement for one round-trip of one such fight fight 482) is as follows Ticket revenue (111 was c ancy *5258 $18,58 10. Variable expenses $10.00 per person) Flight prouation Depreciation of alrcraft fund for aircraft! Bagage Loading and Flight preparation Overnight costs for light crew and assistants 500 Het operaties loss 5 (704) The following additional information is available about fight 482 a. Members of the flight crew are paid fixed annual salaries, whereas the night assistants are paid based on the number of round trips they complet 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 482 The bagage loading and fight preparation expense is an allocation of ground crews salaries and depreciation of ground equipment Dropairg flight 482 would have no effect on the companys totalbaggage loading and flight preparation expenses dif fight 482 is dropped, Pegasus Airlines has no authorization at present to replace it with another tight Arca depreciation is due entry to obsolescence Depreciation due to wear and tear is neglig ble Dropping light 482 would not allow Pegasus Airlines to reduce the number of aircraft in its feet or the number of light crew on its payroll Required Required: 1. What is the financial advantage (disadvantage) of discontinuing flight 482? Financial advantage Financial (disadvantage)