Use the data for Donovan, Inc., in Exercise 6-29B to illustrate Donovans income tax advantage from using

Question:

Use the data for Donovan, Inc., in Exercise 6-29B to illustrate Donovan’s income tax advantage from using LIFO over FIFO. Sales revenue is $9,200, operating expenses are $1,800, and the income tax rate is 40%. How much in taxes would Donovan save by using the LIFO method versus FIFO?