MOCK 4 BPP PG 353

Most of hemlock co competitor value their inventory using AVCO whereas Hemlick co used FIFO. The value of hemlock co inventory at 30september 20X3 on FIFO basis is 40$m. However on Avco basis it would be valued at $36million. By adopting the same method avco as its competitors the assistant accountant says the company would improve its profit for the year ended 30september 20X3 by $4m. Hemlock inventory at 30september 20X2 was reported as $30m. However on Avco basis it would have been reported as 26.8$m. What will be the effect of the change on profit for the year ended 30september 20X3. A) increase by 800000$ B)reduced by 800000$ C)increased by 3200000$ D)reduced by 3200000$ Can you please explain the question sir??