Heinz Company began operations on January 1, 2014, 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 2014 2015
FIFO $640,000 $ 712,000
LIFO $560,000 $636,000
Net Income
(computed under the FIFO method) $980,000 $1,130,000
Based on the above information, a change to the LIFO method in 2015 would result in net income for 2015 of
a. $1,170,000
b. $1,130,000
c. $1,054,000
d. $1,050,000
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