1. The problem asks about the ABC principle and how effort and money can be saved by applying controls to different dollar-volume classes. 2. The ABC principle is a method of categorizing inventory or items based on their importance, often measured by dollar volume or value. 3. According to the ABC principle: - Class A items are high-dollar-volume items and require tighter controls. - Class B items are moderate-dollar-volume items and require moderate controls. - Class C items are low-dollar-volume items and require looser controls. 4. This approach saves effort and money by focusing resources where they have the most impact. 5. Therefore, the correct applications are: - Applying looser controls to the lower-dollar-volume class (Class C). - Applying tighter controls to the higher-dollar-volume class (Class A). 6. Applying equal controls across all dollar-volume classes is not efficient and does not save effort or money. Final answer: The ABC principle saves effort and money by applying looser controls to the lower-dollar-volume class and tighter controls to the higher-dollar-volume class.