UESTION 22

If a company incorrectly classified $5,000 of manufacturing overhead costs as period costs instead of product costs, which of the following statements is true assuming that there were no product sales during the period?

		The ending inventory balance will be overstated by $5,000.
		Net income for the period will be $5,000 lower than if the cost had been appropriately classified.
		The ending inventory balance will be unchanged as a result of the misclassification.
		Net income for the period will be $5,000 higher than if the cost had been appropriately classified.