Exercise 1-16B The fraud triangle company The accounting records of ortiz Manufacturing Company (oMc revealed that the incurred $3 million of materials, $5 million of production labor, $4 million of manufacturing overhead, and $6 million of selling, general, and administrative expense during 2014. It was dis- covered that OMC's chief financial officer (CFO) included $1.5 million dollars of upstream re- search and development expense in the manufacturing overhead account when it should have been classified as selling, general, and administrative expense. OMC made 5,000 units of product and sold 4,000 units of product in 2014. Required statements (i e., assets, liabilities, equity a. Indicate whether the elements on the 2014 financial the mis- revenue, expense, and net income would be overstated or understated as a result of of classification of the upstream research and development expense. Determine the amount the overstatement or understatement for each element. the research and b. Speculate as to what would cause the C to intentionally misclassify triangle.) development expense. (Hint: Review the chapter material regarding the fraud