The Crevier Corporation began business on January 1, 2015. The following table shows information about inventories, as of December 31, for three consecutive years under different valuation methods. Assume that purchases are $60,000 each year. Using this information and assuming that the same method is used each year, you are to answer each of the questions that follow.

FIFO cost, item-by-item valuation.
1. Which inventory basis would result in the highest net income for 2015?
2. Which inventory basis would result in the highest net income for 2016?
3. Which inventory basis would result in the lowest net income for the three years combined?
4. For the year 2016, how much higher or lower would net income be on the FIFO cost basis than on the lower-of-cost-or-market basis?

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Lower of IR0D FIFO Market Cost or Market 0,400 1,600 11,600 8,800 13,000 $14500 11,500 12,900 2016 13,400