1-17. Cost Data for Managerial Purposes As an analyst in an airline's finance department, you are asked to help the operations staff. Person- nel has identified a new method of loading baggage that is expected to result in a 30 percent reduc- tion in labor time but no changes in any other costs. The current labor cost to load bags is $1.00 per bag. Other costs are $0.50 per bag. Required (a)What differential costs should the operations staff consider for the decision to use the new method next year? What would be the cost savings per bag using it?

(b)Describe how management would use the information in requirement and any other ap- propriate information to proceed with the contemplated use of the new baggage loading method.