Assuming that the number of units produced exceeds the number of units sold,misclassifying period costs as product costs will overstate net income relative to what net income would be without this error.

Question

Quizplus · Accepted Answer

Misclassifying period costs as product costs will result in these costs being included in the cost of goods sold, which will overstate the amount of expenses that are deducted from revenue to arrive at net income. As a result, net income will be overstated relative to what it would be if the costs were correctly classified as period expenses.

Assuming That the Number of Units Produced Exceeds the Number