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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?


Definitions:

Generalization

A broad statement or concept obtained by inference from specific cases.

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The impact of how information, choices, or situations are presented on people’s perceptions, decisions, and actions.

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The potential for losses or negative outcomes that might occur as a result of engaging in a negotiation process.

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The practice of attributing specific characteristics or behaviors to individuals based on their membership in a particular group, without recognizing individual differences.

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