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:

Efficient Market

A market in which all available information is fully and immediately reflected in stock prices, making it impossible to achieve consistently higher returns.

Profit Opportunities

Situations where businesses can earn additional profits due to market conditions, innovations, or identifying unmet needs.

Laissez-faire Market

An economic model where exchanges between individuals or businesses are not subject to governmental regulations, preferential treatments, duties, or financial support.

Economics

The social science that studies the production, distribution, and consumption of goods and services.