Zehms Company began operations in 2010 and adopted weighted-average pricing for inventory. In 2012, in accordance with other companies in its industry, Zehms changed its inventory pricing to FIFO. The pretax income data is reported below.
Year Weighted-Average FIFO
- 2010 $381,400 $413,200
- 2011 394,800 423,400
- 2012 417,800 475,400
Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.