Clueless Company has been using a Traditional Overhead Application Rate to allocated overhead costs across three of its product lines. The following results at the end of the year reflect the Company's Unit Sales Price, Cost and Gross Margin as follows:

Traditional Overhead Costing System

                                         

                                        Product A       Product B        Product C

Per Unit Price            $100                $110                       $150

Per Unit Cost                 $67                      $78                          $110

Gross Profit                  $33                  $ 32                               $ 40

If the company instead uses an ABC overhead allocation costing system, the results would be as follows:

ABC Overhead Costing System

                                     Product A       Product B         Product C

Per Unit Price             $100               $110                     $150

Per Unit Cost                $59                 $68                            $175

Gross Profit               $41                   $42                        (25)

Based on the information above, the company is likely:

Answer rating: 100% (QA)

Based on the information providedClueless Company is likely Overcosting Product A and Product B and ... View the full answer