XYZ Corp. discloses in its 2010 10-K report that LIFO reserve decreased from $26 million (in 2009) to $20 million (in 2010). Assuming that there were no LIFO liquidations:

a) Did input prices paid by XYZ during 2010 Increase, Decrease or were Unchanged?

b) How much money has XYZ saved or lost in taxes by using LIFO since inception (at end of 2010)? Assume a tax rate of 35%.

c) How much money did XYZ save or lose in taxes by using LIFO during 2010?

d) If XYZ reported pretax income of $8 million in 2010, compute the pretax income XYZ would have reported had they used FIFO.