Happywell is a leading player in the holiday package industry, offering comprehensive holiday package companies that provide the flight, accommodations and transfer to support tourism in Westland. Happywell has hired a dedicated team of 4 full-time travel agents to sell their holiday packages at approximately 1900 chargeable hours per year and other travel products and each agency receives a commission of W$72,000 per year, Happywell Holliday ensures top-notch marketing advice and support. Happywell has estimated its other cost for the coming years as follows: Costs W$ '000 Advertising & Marketing 300 Accommodation 800 Flight operation 850 Transportation 110 The company employs an additional 6 marketing support/administration staff, with a combined total salary cost of W$136,800 per year. Happywell Holliday has estimated its annual costs, covering Transportation, advertising, Flight operation, and accommodation. Happywell has been using traditional costing to each customer by recording the chargeable hours spent on each customer and using a single cost rate of W$65 per chargeable hours. The same basis has been used to estimate the costs of packages when advertising to the customers. Customer A B C Website & media per package 20 40 35 Type of room per package 250 500 350 Type of seat per package 300 700 500 Distance (miles) to destination 50 70 65 In our commitment to delivering bespoke holiday packages, we are revising our cost allocation strategy. Instead of a single cost rate, we are transitioning to individual costings wherever feasible using the activity based costing method. Our senior Manager, leading this initiative, has gathered crucial information: Happywell Company's policy mandates that for commission to agent including transportation, our agents will travel the day before, staying in local accommodations to maximize time with customers. The cost of telecommunication to the customers is contingent on the number of customers. As we embark on this transformative journey, Happywell Holiday Company aims to elevate travel experiences, ensuring that each customer receives a tailor-made holiday package that reflects our commitment to excellence. Evaluate the information in Appendix 1 using activity-based costing. Compare the figures obtained through activity- based costing with those from traditional absorption costing. Explain and discuss which costing method is more appropriate for Happywell. (10 marks)