The Accountant at Landry Company Is Figuring Out the Difference

question 109

Multiple Choice

The accountant at Landry Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $8,740. The LIFO method will result in income before taxes of $8,100. What is the difference in tax that would be paid between the two methods?

• A) $640
• B) $448
• C) $192
• D) Cannot be determined from the information provided.

---

Definitions:

Marginal Revenue

The extra revenue generated from the sale of an additional unit of a product or service.

Deadweight Loss

The reduction in total surplus that results from a market distortion, such as a tax, subsidy, or price control.

Society's Welfare

A measure of the overall well-being and quality of life of the members of a society, often considered in economic terms but also including factors like health, education, and environmental quality.

Monopolist

An entity that is the sole provider of a particular product or service in the market, having significant control over pricing.