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 $22,000 and a LIFO cost of $20,500.The ending inventory on December 31 is $24,750 at FIFO cost and $21,800 at LIFO cost.The LIFO effect is ________.

A) $2,950
B) $1,500
C) $4,450
D) $1,450