Spinelli Co. started operations on Jan 1, Year 1, and uses the FIFO method to cost its inventory. Spinelli Co is considering a change to the average cost method and wants to know how this change will affect pre tax income. Consider the proceeding information about ending inventory balances for year 1 & 2: FIFO - Year 1 $480,000 / Year 2 $540,000 Average Cost - Year 1 $400,000 / Year 2 $500,000 Considering the above, if Spinelli Co. has pre-tax income (calculated using FIFO) in year 1 of $750,000 and year 2 of $900,000, a change to the average cost method in year 2 would result in pre-tax income for year 2 of

A)$940,000

B)$860,000

C)$980,000

D)$790,000