Nichols Company Had 400 Units of "Dink" in Its Inventory

question 32

Multiple Choice

Nichols Company had 400 units of "Dink" in its inventory at a cost of $12 each. It purchased 600 more units of "Dink" at a cost of $18 each. Nichols then sold 700 units at a selling price of $30 each. The LIFO liquidation overstated normal gross profit by

• A) $ -0-
• B) $ 600.
• C) $1,200.
• D) $1,800.

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Definitions:

Horizontal Axis

The x-axis in a graph, typically representing the independent variable or the quantity of goods in economic graphs.

Vertical Axis

In a graph or chart, the y-axis along which numerical data, typically representing a variable being measured, is plotted.

Budget Line

A graphical representation of all possible combinations of two goods which a consumer can purchase with a given budget, at fixed prices for those goods.

Prices Rise

A situation where the general level of prices for goods and services increases over a period of time, reducing purchasing power, often referred to as inflation.