Answer the Following Questions Using the Information Below

question 112

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 for an economically reasonable cost
• D) have separate allocation rates for each department

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Definitions:

Intellectual Infrastructure

Encompasses the knowledge resources, institutions, and networks that support the creation, dissemination, and utilization of information and innovation.

Technological Factor

Technological factor relates to the impact that advancements and innovations in technology have on a business's operations, strategies, and competitiveness in the marketplace.

Internal Management

The administration and organization of a company's internal affairs, including human resources, operations, and policies.

Mode Of Entry

The strategy or method used by a company to enter into a new market or country for conducting business.