The manager of Weiser is given a bonus based on net income before taxes.The net income after taxes is $59,500 for FIFO and $49,000 for LIFO.The tax rate is 30%.The bonus rate is 20%.How much higher is the manager's bonus if FIFO is adopted instead of LIFO?
A)$15,000
B)$21,000
C)$3,000
D)$10,500

Question

Quizplus · Accepted Answer

The net income before taxes for FIFO is $85,000 and for LIFO is $70,000. The bonus difference is 20% of the difference in pre-tax income, which is $15,000. Therefore, the bonus difference is $3,000.

The Manager of Weiser Is Given a Bonus Based on Net