Hi, Im having a hard time understanding this. I would appreciate an explanation so much! Thank you!

Pernell Company reported LIFO reserves of $150,000 and $100,000 in Year 2 and Year 1, respectively. The company utilized the FIFO assumption for internal purposes. Based on this information, we can conclude that at the end of Year 2, Pernell's ending inventory would have been

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$150,000 higher if it had used FIFO.

$150,000 lower if it had used FIFO.

$50,000 higher if it had used FIFO.

$50,000 lower if it had used FIFO.