When Selling Prices Are Based on Costs Assigned Using the Single

Multiple Choice

When selling prices are based on costs assigned using the single cost driver, direct labour hours, then the Mossman 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.