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 total amount of indirect cost assigned to produce chess pieces using the traditional method is ________ the total amount assigned using ABC.
A)more than
B)less than
C)identical to
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

Under the traditional cost system, the cost assigned to the chess pieces is higher ($325) compared to the cost assigned under the ABC system ($298), indicating that the total amount of indirect cost assigned using the traditional method is more than the amount assigned using ABC.

Answer the Following Questions Using the Information Below