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Overcosting a product can lead to losing market share as competitors underprice the overcosted product, or the product is priced too high for the market. Operating efficiencies and understating costs are not accurate results of overcosting a product. A product can be top-selling but still result in losses if its costs are overstated.

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ABC Examples

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2) Over costing a particular product may result in:

A) loss of market share

B) pricing the product too low
C) operating efficiencies
D) understating total product costs

A top-selling product might actually result in losses for the company – True

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