Nichols Inc. manufactures remote controls. Currently the company uses a plantwide rate for allocating manufacturing overhead. The plant manager is considering

switchingover to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows:

Activities	Cost driver	Allocation Rate
Material handling	Number of parts	$7.00 per part
Assembly	Labor hours	$10.00 per hour
Inspection	Time at inspection station	$20.00 per minute

The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $150.00 per labor hour.

Nichols' management is considering to implement ABC system because ________.

A. ABC system is a highly refined costing system

B. ABC system requires minimal expertise to operate

C. ABC system provides more accurate direct cost figures

D. ABC system can be implemented cheaply