The Manager of Brick Company Is Given a Bonus Based

question 155

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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