TB MC Qu. 1-41 (Algo) Howard Lumber Company mistakenly classified... Howard Lumber Company mistakenly classified a product cost as an expense that totaled $19,300. The company produced 1,930 units of product and sold 965 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: Multiple Choice product costs were overstated. management bonuses were underpaid. the company's income statement portrayed a more favorable position than actually existed. the company's net income was overstated