Question 4 1 / 1 point Wallace Printing has contracts to complete weekly supplements required by forty-six customers. For the year 2016, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 10 million pages. For 2016 Wallace Printing decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis: Manufacturing overhead costs Activity level Cost pool 200 design changes Design changes $60,000 Setups 320,000 4,000 setups 16,000 inspections Inspections 40,000 Total manufacturing overhead costs $420,000 During 2016, two customers, Wayward Insurance and Hapless Systems, are expected to use the following printing services: Wayward Hapless Insurance Systems Activity Pages 60,000 76,000 Design changes 101 21 Setups 20 101 Inspections 30 381 When selling prices are based on costs assigned using the single cost driver, number of pages printed, then Hapless Systems 1) is fairly billed because resources are allocated uniformly to all jobs. 2) is grossly under billed for the job, while other jobs will be unfairly over billed. 3) will be pleased because all customers will be under billed for their jobs. 4) will contribute too little to profits, and Wallace Printing will not want to accept additional work from the company 5) will likely seek to do business with competitors