Save by using the LIFO method versus FIFO

Assignment Help Financial Accounting

Reference no: EM13863879

Big Fish, Inc., inventory records for a particular development program show the following at July 31:

Data Table

Jul 1: Beginning Inventory..................... 9 units @ $165

July 15: Purchased .............................. 5 units @ $166

July 26: Purchased.............................. 13 units @ $175

At July 31, eleven of these programs are on hand. Big Fish calculated it's cost of goods sold using LIFO at $2,773 and it's cost of goods sold using FIFO $2,665.

Requirement 1:

Sales revenue is $9,200, operating expense are $1,700 and the income tax rate is 40%. How much in taxes would Big Fish Inc., save by using the LIFO method versus FIFO ?

Difference in methods..............?

x Income tax rate....................?

Tax savings using LIFO..................?

Reference no: EM13863879

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