Our preliminary analysis reveals that many of you problem are related to the mix of products and customers that you are emphasizing .your choices of product and customers mixes are rooted in the way you are currently assigning costs to products. You are using a traditional , functional-based costing system, and our analysis shows that it is causing distortions in product costs. The functional-based system is indicating that you low-volume products .which typically require more complex manufacturing procedures and more special handling are earning a higher margin than your high-volume, less complex-to-product products.