1. Using an inappropriately high, normal capacity activity level to compute the predetermined OH rate, thereby reducing product cost and increasing operating income upon the sale of inventory—given that the closing of the underapplied manufacturing OH account would be deferred for multiple periods
2. Producing significantly more inventory than is necessary to meet current and anticipated sales, thereby lowering the predetermined fixed OH rate per unit, while increasing reported operating income
3. Treating period costs as product costs rather than expenses to inflate inventory (assets) and increase reported net income
4. Manipulating sales around the end of an accounting period to shift revenues and expired product costs into the current period or into the following period
5. Choosing a method of OH allocation that distorts the “true” profitability of specific products or specific subunits