Question 1 (30 marks) Malaysia Airlines historically distributes the indirect costs of lost and damaged baggage to its three major hubs using a basis of annual number of flights in and out of each hub. Last year $667,500 was distributed as in Table 2: Table 1: Distribution of Indirect Costs Hub Airport Flights Rate. S per flight Allocation, s 55,000 12 330,000 22,800 9 189,500 15,000 150,000 AUH KUL LAX 10 The airline's baggage management director suggests that an allocation on the basis of baggage traffic, not flights, will better represent the distribution, primarily based on the fact that the high fees now charged to passengers to check luggage have significantly changed the number of bags handled at the major hubs. Total number of bags handled during the year are 2,490,000 at AUH, 1,582,400 at KUL, and 763,500 at LAX Based on the given information, a. Explain the activity and the cost driver for the suggested baggage- (5 marks) traffic basis? b. Using the baggage-traffic basis, determine the allocation rate using last (15 Marks) year's total of 5669,500, and distribute this amount to the hubs this year. Determine the percentage changes in allocation at each hub using the (10 Marks) two different bases