Answer the Following Questions Using the Information Below

question 2

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 labour 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 types of wood used.The new cost of a set of chess pieces was determined to be $298.00 per set.
-Given this change in the cost structure:

• A)the costing results for chess pieces under the new system depend on the adequacy and quality of the estimated cost drivers and costs used by the system.
• B)chess pieces are definitely more accurately costed.
• C)chess will now have a lower sales price.
• D)chess pieces have benefited from the new system.

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