Towly Incorporated manufactures products J and K$,$ applying overhead on the basis of labor hours. J$,$ a low$-$volume product, requires a variety of complex

manufacturing procedures. K is both a high$-$volume product and relatively simplistic in nature. What would an activity$-$based costing system likely disclose

about products J and K as a result of Towly's current accounting procedures?

Products J and K are undercosted.

Products J and K are overcosted.

Product $J$ is undercosted and product $K$ is overcosted.

Product $K$ is undercosted and product $J$ is overcosted.

None of the answers is correct.