The Manager of Brick Company Is Given a Bonus Based

question 195

Multiple Choice

The manager of Brick Company is given a bonus based on income before income taxes. Net income, after taxes, is $11,200 for FIFO and $9,800 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) $84
• B) $2,800
• C) $400
• D) $420

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