Costco Memberships - $120 vs $60. Help!

The $60 membership has no notable perks - just a basic membership. The $120 membership earns 2% back. That means you need to spend $3,000 to make up the extra $60 you pay for the higher membership and $6,000 to cover the full $120. Anything beyond the $6k is profit.

Last year my wife opted for the $120 membership and our cash back reward was $113. That means this next year I can downgrade to the lower membership and have an extra $57 or I can pay the $7 difference for the higher membership. However, I'm thinking this option actually means I'm paying more in total.

Year 1 + Year 2 = Total

A) $60 + $60 = $120 cost

B) $120 + $120 - $113 = $127 cost

C) $120 + $60 - $113 = $67 cost

If our spending for this next year is comparable to last year, and we continue with the higher membership, doesn't that mean I'm basically paying $67 for a membership ($60 for the base price + the $7 difference)? It seems like the only way the higher membership is worth it is if A) you spend more than the $6k, or B) you downgrade to the lower membership. Am I missing something?

Edit: Line B) should include the second years' return. If our spending is comparable and we get the same return next year then that means we're paying $7 a year for our membership. $120 + $120 - $113 - $113 = $14 cost