Caspar Corp

question 43

Multiple Choice

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.

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Definitions:

Containing Costs

involves measures or strategies employed to control, reduce, or keep expenses within certain limits or budgets.

Health Care Expenditures

The total amount of money spent on health care services, products, and medication by individuals, private entities, and governments.

GDP

Gross Domestic Product, the total value of all goods and services produced within a country's borders in a specific time period.

Health Savings Accounts

Tax-advantaged savings accounts available to individuals in the U.S. enrolled in high-deductible health plans, used to pay for medical expenses.