$1$

$2806$k

As an analyst at Delta Air Lines, you are asked to help the operations staff. Operations has identified a new method of loading baggage that is expected to result in a $15$ percent reduction in labor time but no changes in any other costs. The current labor cost to load bags is $$4$ per bag. Other costs are $$3$ per bag.

Required:

a$-1.$ What differential costs should the operations staff consider for the decision to use the new method next year? a$-2.$ What would be the cost savings per bag using it$?$

b$.$ How would management use the information in requirement $($a$)$ and any other appropriate information to proceed with the contemplated use of the new baggage loading method?