Answer the Following Questions Using the Information Below

question 5

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.
-A key reason for using an ABC system rather than a department-costing system is because ABC assigns indirect costs:

• A)more simply than a department-costing system.
• B)in a less costly manner.
• C)to reflect differences required by different processes as well as customers.
• D)using broader averages.

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Definitions:

Measurement Error

refers to the difference between the actual value and the measured value caused by imprecision or inaccuracies in data collection or analysis.

Job Breadth

The extent of responsibilities and variety of tasks included in a job.

Individual Difference Moderators

Variables that influence how different people respond to the same situation or treatment.

Individual Preferences

The specific likes, dislikes, desires, and needs that vary from one person to another, influencing their behavior and choices.