Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

Cost PoolOverhead CostsCost driverActivity level

Supervision of direct labour$320,000Direct labour hours800,000

Machine maintenance$120,000Machine hours960,000

Facility rent$200,000Square metres of area100,000

Total overhead costs$640,000

The accounting records show the Mossman Job consumed the following resources:

Cost driverActual level

Direct labour-hours200

Machine-hours1,600

Square metres of area50

7) If Gregory Enterprises uses a simple cost system based on direct labour hours then what amount of indirect costs will be allocated to the Mossman job?

8) What is the activity rate for machine maintenance costs?

9) If Gregory Enterprises uses an ABC system then what amount of indirect costs will be allocated to the Mossman job?

10) When selling prices are based on costs assigned using the single cost driver, direct labour hours, then would the Mossman job be overbilled or underbiiled?