The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

This is what I come up with when doing this equation.

35,700/ 30% =119,000 29,400/30%= 98,000
119,000 * 20% = 23,800 98,000 * 20% = 19,600

23,800
-19,600
=4,200

I know this is not right; can someone please help me figure out where I'm going wrong?

You were asked to find the difference. Key point; you were dealing with after tax data so comprehension is important. the tax rate is extraneous information used to evaluate your ability to cut to the chase


35700 - 29400 = 6300. 6300 * 20% = 1260