1. Which of the following is NOT a primary assumption in a cost-volume-profit analysis? Total sales and total costs can be represented by straight lines. Within the relevant range of operating activity, the efficiency of operations does not change. Costs can be divided into fixed and variable components. There is a change in the inventory quantities during the period. 2. Which type of chart plots only a profit line rather than sales and cost lines? Cost-volume-profit chart Profit-volume chart Profit-cost chart Cost-volume chart

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?