Nichols Company Had 500 Units of "Dink" in Its Inventory

question 72

Multiple Choice

Nichols Company had 500 units of "Dink" in its inventory at a cost of $5 each. It purchased, for $2,400, 300 more units of "Dink". Nichols then sold 600 units at a selling price of $10 each, resulting in a gross profit of $2,100. The cost flow assumption used by Nichols.

• A) is FIFO.
• B) is LIFO.
• C) is weighted average.
• D) cannot be determined from the information given.

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Definitions:

Overestimated

Overestimation refers to the assessment of something as more significant or larger than it actually is in reality.

Random Sample

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The act of reducing or eliminating nuclear weapons to prevent nuclear warfare, promoting international peace and security.

Alphabetical Listing

A method of organizing items or information in order based on the first letter of each item in the alphabet.