1) In three to four sentences, describe why traditional, volume-based product costing distorts product costs.

2) Describe the behavior of fixed and variable costs in total and on a per-unit basis with respect to units of activity. For example, do fixed costs and variable costs in total increase or decrease as sales increase? Do they increase or decrease on a per-unit basis with an increase in sales?

3) Describe at least three objectives of budgeting in an aviation business.

5) Describe at least three reasons why managerial accounting is important to managers for planning, controlling, and decision-making.