Answer the Following Questions Using the Information Below

question 140

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.
-What is the goal of a properly constructed ABC system?

• A)Identify more indirect costs
• B)Have separate allocation rates for each department
• C)Develop the best cost system for an economically viable cost
• D)Have the most accurate cost system

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Definitions:

Google

A global technology company best known for its search engine, but also offering a wide range of Internet-related services and products.

Strategic Emphasis

Refers to an organization's focus on key areas that are deemed crucial for achieving its long-term goals and objectives.

Entire Business Cycle

The complete sequence of phases in business activity, from an initial increase in economic activity to its peak and subsequent decline and recovery.

Speed

The rate at which someone or something is able to move or operate.