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Profits have been decreasing for several years at Fly with Us $($FWU$)$ Airlines. In an effort to improve the company's performance,

consideration is being given to dropping several flights that appear to be unprofitable.

A typical income statement for one such flight $($Flight $401)$ follows:

The following additional information is available about Flight $401$:

a$.$ Members of the flight crew are paid fixed annual salaries, whereas the flight attendants are paid by the flight.

b$.$ One$-$third of the liability insurance is a special charge assessed against Flight $401$ because, in the opinion of the insurance company,

the destination is in a high$-$risk area. The remaining two$-$thirds would be unaffected by a decision to drop Flight $401.$

c$.$ The baggage loading and flight preparation expense is an allocation of ground crew's salaries and depreciation of ground

equipment. Dropping Flight $401$ would have no effect on the company's total baggage loading and flight preparation expenses.

d$.$ If Flight $401$ is dropped, FWU Airlines has no authorization at present to replace it with another flight.

e$.$ Depreciation of aircraft is due entirely to obsolescence. Depreciation due to wear and tear is negligible.

f$.$ Dropping Flight $401$ would not allow FWU Airlines to reduce the number of aircraft in its fleet or the number of flight crew on its

payroll.

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