Answer the Following Questions Using the Information Below

question 61

Multiple Choice

Answer the following questions using the information below:
Marpole Enterprises has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year:
The accounting records show the Bossman Job consumed the following resources:

-When selling prices are based on costs assigned using the single cost driver, direct labour hours, then the Bossman job

• A)is fairly billed because resources are allocated uniformly to all jobs.
• B)is grossly under billed for the job, while other jobs will be unfairly over billed.
• C)may increase overall sales as other jobs will be cross-subsidized.
• D)will contribute too little to profits, and Gregory Enterprises will not want to accept additional work from the company.
• E)will likely seek to do business with competitors.

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Definitions:

Price-Searcher Market

A market structure where sellers have the ability to control or influence prices due to a lack of perfect competition.

Fast Food Market

The sector of the food service industry that specializes in food that can be prepared and served quickly.

Market Analysis

The examination of the size, trends, and competition in a particular market, intended to inform business decisions and strategy development.

Competitive Price-Searcher

A firm that must actively seek out the best price for its goods or services due to the presence of many competitors and informed buyers.