Lyle Co. was franchised on January 1, 2013. At the end of its third year of operations, December 31, 2015, management requested a study to determine what effect different materials inventory costing methods would have had on its reported net income over the three-year period.
The materials inventory account, using LIFO, FIFO, and mov- ing average, would have had the following ending balances:

a. Assuming the same number of units in ending inventory at the end of each year, were material costs rising or falling from 2013 to 2015?
b. Which costing method would show the highest net income for 2013?
c. Which method would show the lowest net income for 2015?
d. Which method would show the highest net income for the three yearscombined?

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December 31 2013 2014 2015 LIFO $20,000 20,000 20,000 Materials Inventory Balances FIFO $22,000 24,000 30,000 Average $21,000 23,000 27,667