A Company Just Starting in Business Purchased Three Merchandise Inventory

question 166

Multiple Choice

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be

• A) $65.
• B) $75.
• C) $60.
• D) $50.

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Definitions:

Algorithms

Step-by-step procedures or formulas for solving a problem or accomplishing a specific task, often used in computing and mathematics.

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions, leading to statistical errors.

Probability Distribution

An equation or model that describes the likelihood of various outcomes in a stochastic process.

Random Sample

A subset of individuals chosen from a larger set, where each individual is chosen randomly and entirely by chance, giving each individual an equal probability of being chosen at any stage during the sampling process.