The management of an amusement park is considering purchasing a new ride for $85,000 that would have a useful life of 10 years and a salvage value of $10,500. the ride would require annual operating costs of $34,500 throughout its useful life. the company's discount rate is 9%. management is unsure about how much additional ticket revenue the new ride would generate-particularly since customers pay a flat fee when they enter the park that entitles them to unlimited rides. hopefully, the presence of the ride would attract new customers. (ignore income taxes.)

required: how much additional revenue would the ride have to generate per year to make it an attractive investment?

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?