Which one of the following statements is true with respect to Lily Ice Cream Company?

a. The original traditional overhead allocation system ignored the impact of spoiled goods on the calculation of gross profit.

b. The original materials warehouse requisition system did not include adequate controls to ensure separation of duties.

c. The original manufacturing overhead application system based on gallons of ice cream did not provide accurate insight on overhead cost behavior.

d. The original overhead application system overstated cost of goods sold during times of inflation.