A Company Just Starting in Business Purchased Three Merchandise Inventory

question 26

Multiple Choice

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $64; Second purchase $76; Third purchase $68. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be

• A) $56.
• B) $60.
• C) $62.
• D) $68.

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Definitions:

Commercial Zones

Specific areas designated in a city or municipality that are reserved for commercial use and the exchange of goods and services.

Tapering Rates

The graduated adjustment of charges or fees based on scale or volume, commonly used in shipping or services pricing.