SALES The following additional information is available about flight :
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 Onethird of the liability insurance is a special charge assessed against flight because, in the opinion of the insurance company,
the destination of the flight is in a "highrisk" area. The remaining twothirds would be unaffected by a decision to drop flight
c The baggage loading and flight preparation expense is an allocation of ground crews' salaries and depreciation of ground
equipment. Dropping flight would have no effect on these expenses.
d If flight is dropped, Pegasus Airlines will not replace it with another flight.
e Wear and tear on the aircraft caused by this flight is negligible.
f Dropping flight would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of flight crew on its
payroll.
Required:
What is the financial advantage disadvantage of discontinuing flight
