Answer the Following Questions Using the Information Below

question 111

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 reduction in cost per unit of wooden chess pieces under ABC system is due to difference in allocation of ________.

• A) labor costs
• B) prime costs
• C) indirect costs
• D) material costs

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Definitions:

C$ Weakens

A situation in which the Canadian dollar decreases in value relative to other currencies.

US$ Per C$

The exchange rate that defines how much one Canadian dollar (C$) is worth in United States dollars (US$).

C$0.0033

A specific monetary value in Canadian dollars, equivalent to 0.33 cents.

Euros

The official currency of the Eurozone, used by 19 of the 27 European Union countries.