Bus 213 Managerial Accounting Chapter 23 Excel HW (2 of 2) Due Date: Friday, December 1, 2017 Name In your new role as Chief Financial Analyst for Monster Airlines, Inc., you have been asked to evaluate one of the company's unprofitable flights, from Columbus to Denver. Top management would like to eliminate this run in an effort to improve the overall profits of the company A typical income statement for the Columbus-Denver round-trip is as follows $200 ticket) Ticket revenue (175 seats 40% occupancy Variable expenses (S15 per person) $14,000 1,050 Contribution margin 12,950 1,800 750 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 Total flight expenses Net operating loss 5,800 4,200 1,500 1,700 -300. 17.600 $(4.650 The following additional information is available about the flight 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 One-third of the liability insurance is a special charge assessed against the flight 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 the fight. The baggage loading and flight preparation expense is an allocation of ground crews salaries and depreciation of ground equipment. Dropping the flight would have no effect on the company's total baggage loading and flight preparation expenses. If the flight is dropped, Monster Airlines has no authorization at present to replace it with another flight Aircraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is negligible a. b. c. d. e