Lanier company began operations on january 1 2012 and uses

Reference no: EM13593211

Lanier Company began operations on January 1, 2012, and uses the FIFO method in costing its raw material inventory. Management is contemplating a change to the LIFO method and is interested in determining what effect such a change will have on net income. Accordingly, the following information has been developed:

Final Inventory 2012 2013

FIFO $320,000 $360,000

LIFO 240,000 300,000

Net Income 500,000 550,000

(Computed under the FIFO method)

Based upon the above information, a change to the LIFO method in 2013 would result in net income for 2013 of:

a. $490,000

b. $550,000

c. $570,000

d. $610,000

Reference no: EM13593211

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