(Answered) Problemin the question above assume that 2016s ending

Accounting

Problem

In the question above, assume that 2016's ending inventory is $23 million using average cost, and would have been $26 million if the company had not switched from the FIFO method. The effect of the change in method on 2016 net income is a:

1,800,000 decrease

3,000,000 decrease

600,000 decrease

1,000,000 decrease.

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