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