When selling prices are based on costs assigned using the single cost driver, direct labour hours, then the Bossman job OA. may increase overall sales as other jobs will be cross-subsidized OB. will contribute too little to profits, and Gregory Enterprises will not want to accept additional work from the company OC. is fairly billed because resources are allocated uniformly to all jobs OD. will likely seek to do business with competitors OE. is grossly underbilled for the job, while other jobs will be unfairly overbilled Estimates of Cost

When selling prices are based on costs assigned using the single cost driver, direct labour hours, then the Bossman job OA. may increase overall sales as other jobs will be cross-subsidized OB. will contribute too little to profits, and Gregory Enterprises will not want to accept additional work from the company OC. is fairly billed because resources are allocated uniformly to all jobs OD. will likely seek to do business with competitors OE. is grossly underbilled for the job, while other jobs will be unfairly overbilled Estimates of Cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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