Problem $11-23($Algo$)$ Dropping or Retaining a Flight $[$LO$11-2]$

In an effort to increase profits, Pegasus Airlines is thinking about dropping several flights that appear to be unprofitable.

A typical income statement for one round$-$trip of one such flight $($flight $482)$ is as follows:

Ticket revenue $(170$ seats $40\%$ occupancy $$ $$210$ ticket price$)$$ $14,280100\mathrm{.}0\%$Variable expenses $($$$15\mathrm{.}00$ per person$)1,0207\mathrm{.}1$Contribution margin$13,26092\mathrm{.}9\%$Flight expenses:$$Salaries$,$ flight crew$ $1,900$Flight promotion$760$Depreciation of aircraft$1,600$Fuel for aircraft$5,300$Liability insurance$4,500$Salaries$,$ flight assistants$1,400$Baggage loading and flight preparation$1,850$Overnight costs for flight crew and assistants at destination$700$Total flight expenses$18,010$Net operating loss$ $(4,750)$

The following additional information is available about flight $482$:

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 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 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 these expenses.

If flight $482$ is dropped, Pegasus Airlines will not replace it with another flight.

Wear and tear on the aircraft caused by this flight is negligible.

Dropping flight $482$ would not allow Pegasus Airlines to reduce the number of aircraft in its fleet or the number of flight crew on its payroll.

Required:

$1.$ What is the financial advantage $($disadvantage$)$ of discontinuing flight $482?$