The Following Information Comes from the 2007 Occidental Petroleum Corporation $$\begin{array}{l}&2007&2006\\\text { Total }&\$910&\$825\end{array}$$

question 93

Essay

The following information comes from the 2007 Occidental Petroleum Corporation annual report to shareholders:
NOTE 5 INVENTORIES
Inventories of approximately $190 million and $204 million were valued under the LIFO method at December 31, 2007 and 2006, respectively. Inventories ($ in millions) were:
Also, the footnote indicated that the LIFO reserve was $102 million and $74 million at the end of 2007 and 2006, respectively. The LIFO reserve indicates that inventories would have been $102 million and $74 million higher at the end of 2007 and 2006, respectively, if Occidental Petroleum had used FIFO to value its entire inventory.
Required:
If Occidental Petroleum had used FIFO to value its entire inventory how would its 2007 pre-tax income be affected?
$$\begin{array}{l}&2007&2006\\\text { Total }&\$910&\$825\end{array}$$

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Definitions:

Normal Population

A population with a distribution that follows a normal curve, characterized by symmetrical, bell-shaped graph.

Standard Deviation

A measure of the dispersion or variability within a dataset, quantifying the average distance of each data point from the mean.

Test Statistic

A calculated value from sample data used to assess the credibility of a hypothesis in statistics.

Production Filling

A process in manufacturing that involves the controlled dispensation of products, often liquids, into containers.