Heinz Company began operations on January 1, 2017, and uses the first in, first out...
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Heinz Company began operations on January 1, 2017, and uses the first in, first out (FIFC) method in costing its raw material inventory. Management is contemplating a change to the last in, first out (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 2017 2018 $640,000 $712,000 FIFO $560,000 $636,000 LIFO Net Income $980,000 $1,030,000 (computed under the FIFO method) Based on the above information, a change to the LIFO method in 2018 would result in net income for 2018 of $1,070,000 $1,030,000 $954,000 $950,000
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