Goodee Bakery Is Considering a Change in Its Inventory Valuation

Multiple Choice

Goodee Bakery is considering a change in its inventory valuation method. Goodee Bakery currently uses the FIFO method and is considering a change to the LIFO method. Goodee Bakery started the year on January 1 with inventory at a FIFO cost of $23,500 and a LIFO cost of $21,000. The ending inventory on December 31 is $25,600 at FIFO cost and $21,300 at LIFO cost. The LIFO effect is ________.

A) $4,300
B) $2,500
C) $6,800
D) $1,800