The Accountant at Paige Company Is Figuring Out the Difference

question 8

Multiple Choice

The accountant at Paige Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or average-cost as an inventory costing method.The tax rate is 30% and the FIFO method will result in income before taxes of $9,100.The average-cost method will result in income before taxes of $8,225.What is the difference in tax that would be paid between the two methods?

• A)$875.
• B)$375.
• C)$263.
• D)Cannot be determined from the information provided.

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