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.

---

Definitions:

Hourly Rate

The amount of money charged or paid for each hour of work or service.

Regulated Indirectly

Pertains to the control or governance over activities or systems not through direct imposition of laws but via secondary or ancillary means, such as market incentives or guidelines.

Ethical Codes

A set of principles and rules designed to guide the behavior and decision-making of individuals within a profession or organization.

Utilization Guidelines

Standards or protocols established to guide how resources, services, or processes are to be used effectively and efficiently.