Nicholas Industries Had the Following Inventory Transactions Occur During 2022

question 9

Multiple Choice

Nicholas Industries had the following inventory transactions occur during 2022: $\begin{array}{llll}&&\text {Units}&\text { Cost/unit}\\\hline2 / 1 / 22 & \text { Purchase } & 54 & \$ 45 \\3 / 14 / 22 & \text { Purchase } & 93 & \$ 47 \\5 / 1 / 22 & \text { Purchase } & 66 & \$ 49\end{array}$ The company sold 140 units at $65 each. Assume that a periodic inventory system is used, what is the company's gross profit using FIFO?

• A) $2,388
• B) $2,628
• C) $6,472
• D) $9,100

Analyze the cost structure and profitability (economic profits, losses, and normal profits) of firms operating in perfectly competitive markets.

Understand the concept of long-run adjustments in purely competitive markets including entry and exit of firms.

Comprehend that in the long run, purely competitive markets yield zero economic profits due to the entry or exit of firms.

Recognize the conditions under which firms will either enter or leave purely competitive markets.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Chief Executive Officer

The highest-ranking executive in a company, responsible for making major corporate decisions and managing overall operations.

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from its total revenue, excluding taxes and interest.

Product Line

A product line is a group of related products marketed under a single brand by a company, aimed at fulfilling related needs of a market segment.