The following information pertains to Anthara Inc. which uses LIFO to compute the value of inventories. Note: EI stands for "ending inventory." Inventory values computed under the two methods are given below.

End of year	EI - LIFO	EI - FIFO	Income before taxes - LIFO
2004	2,257.0	3,040.7	1,000.7
2005	2,202.9	3,166.6	1,174.0
2006	2,354.4	3,515.2	1,627.5

A. Compute the Income before taxes under FIFO for 2005. (Note: do not use commas in your answer)

A2. Compute the Income before taxes under FIFO for 2006. (Note: do not use commas in your answer)

B. From 2005 to 2006, did input prices rise, fall or remain unchanged? (Note: please submit your answer by typing in either rise, fall, or remain unchanged).

C. From inception till the end of 2006 (i.e., over the life of the company), how much has the company saved or lost in taxes by using LIFO? Assume a tax rate of 40%.

D. Assume that the companys sales exceeds its purchases in 2007. What is the likely effect of this on the gross margin [(Sales-COGS)/Sales]ratio for 2007? (Note: please submit your answer by typing in either increase, decrease or no change.)