Caspar Corp.began operations on January 1, 2016, and uses FIFO to cost its inventory.Management is contemplating a change to the average cost method and is interested in determining what effect such a change will have on pre-tax income.Accordingly, the following information has been developed: Based upon the above information, a change to the average cost method in 2017 would result in pre-tax income for 2017 of
A)$395,000.
B)$430,000.
C)$470,000.
D)$490,000.

Question

Caspar Corp.began operations on January 1, 2016, and uses FIFO to cost its inventory.Management is contemplating a change to the average cost method and is interested in determining what effect such a change will have on pre-tax income.Accordingly, the following information has been developed:  Based upon the above information, a change to the average cost method in 2017 would result in pre-tax income for 2017 of
A)$395,000. 
B)$430,000. 
C)$470,000. 
D)$490,000.

Quizplus · Accepted Answer

The Answer of Caspar Corp.began operations on January 1, 2016, and uses FIFO to cost its inventory.Management is contemplating a change to the average cost method and is interested in determining what effect such a change will have on pre-tax income.Accordingly, the following information has been developed:  Based upon the above information, a change to the average cost method in 2017 would result in pre-tax income for 2017 of
A)$395,000. 
B)$430,000. 
C)$470,000. 
D)$490,000.