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100.0% $15, 120 1, 152 13,968 $ 1,900 790 Jook Ticket revenue (180 seats x 40% occupancy * $210 ticket price) Variable expenses ($16.00 per person) Contribution margin Flight expenses: Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for flight crew and assistants at destination Total flight expenses Net operating loss Print 1,550 5,180 5,480 1,400 1,950 780 18,790 $(4,822) The following additional information is available about flight 482 a. Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips they complete. b. One-third of the ability 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 C. The baggage loading and flight preparation expense is an allocation of ground crews' salaries and depreciation of ground equipment. Dropping flight 482 would have no effect on the company's total baggage loading and light preparation expenses. d. if flight 482 is dropped, Pegasus Airlines has no authorization at present to replace it with another flight e. Aircraft depreciation is due entirely to obsolescence Depreciation due to wear and tear is negligible 1. Dropping flight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of fight crew on its payroll

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