1. 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:

Cost pool	Manufacturing overhead costs	Activity level
Design changes	$60,000	200 design changes
Setups	320,000	4,000 setups
Inspections	40,000	16,000 inspections
Total manufacturing overhead costs	$420,000

During 2016, two customers, Wayward Insurance and Hapless Systems, are expected to use the following printing services:

Activity	Wayward Insurance	Hapless Systems
Pages	60,000	76,000
Design changes	10	2
Setups	20	10
Inspections	30	38

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.

Please explain the reason, I don't understand ,thanks!