1. The storage of raw materials is considered a value-added activity. 2. An example of an appraisal cost is the cost of automating the production process. 3. If a company's plant wide overhead rate is allocated based on direct labor hours, then each job will be allocated manufacturing overhead based on the total direct labor hours incurred on the job, regardless of the manufacturing department in which those hours were incurred. 4. Companies that use departmental overhead rates trace direct materials and direct labor to cost objects just as they would in a traditional costing system. 5. ABC tends to increase the unit cost of low-volume products and decrease the unit cost of high-volume products. 6. A product's contribution margin per unit is the excess of the selling price per unit over the variable cost of obtaining and selling each unit. 7. When using the contribution margin ratio, managers project operating income based upon sales units. 8. CVP analysis helps managers prepare for and respond to economic changes, such as increasing costs and pressure to drop sales price. 9. When ABC, Inc. changes the selling price per unit, it will not affect how many units they must sell to breakeven 10. A company that sells one product would be more likely to calculate breakeven in terms of sales units, rather than sales revenue