Use the data in exercise E5-14 to illustrate Langley's income tax advantage from using weighted-average cost over FIFO cost. Sales revenue is \(\$ 6,000\), operating expenses are \(\$ 1,100\), and the income tax rate is \(25 \%\). How much in taxes would Langley save by using the weighted average cost method versus FIFO?

Exercise 5-14

Langley Inc. inventory records for a particular development program show the following at October 31, 2020:

At October 31, ten of these programs are on hand. Langley uses the perpetual inventory system.

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Oct. 1 Beginning inventory....... 15 Purchase. 26 Purchase.................. 5 units @$150 $ 750 11 units 160= 1,760 5 units @ 170 = 850