Howard Lumber Company Mistakenly Classified a Product Cost as an Expense

Multiple Choice

Howard Lumber Company mistakenly classified a product cost as an expense that totaled $20,000.The company produced 2,000 units of product and sold 1,000 of them during the year.Management is paid a bonus equal to 2% of net income.In the year in which the mistake was made:

A) product costs were overstated.
B) management bonuses were underpaid.
C) the company's income statement portrayed a more favorable position than actually existed.
D) the company's net income was overstated.