Answer the Following Questions Using the Information Below

question 7

Multiple Choice

Answer the following questions using the information below:
Chess Woods Limited produces two products: wooden chess pieces and wooden inlaid chess boards. Under their traditional cost system using one cost driver (direct manufacturing labor hours) , the cost of a set of wooden chess pieces is $325.00. An analysis of the activities and their costs revealed that three cost drivers would be used under a new ABC system. These cost drivers would be equipment usage, storage area for the material, and type of woods used. The new cost of a set of chess pieces was determined to be $298.00 per set.
-The goal of a properly constructed ABC system is to ________.

• A) have the most accurate cost system
• B) identify more indirect costs
• C) develop the best cost system that meets the cost/benefit test
• D) have separate allocation rates for each department

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Definitions:

GPA

Grade Point Average, a numerical representation of a student's academic achievement, calculated by dividing the total amount of grade points earned by the total amount of credit hours attempted.

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An academic degree earned after completing a course of study at a college or university, usually lasting four years in the United States.

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An assessment designed to measure a person's knowledge, skills, or proficiency in a specific area or field.