What is Nueva's net income if it elects FIFO?
A)$440.
B)$264.
C)$620.
D)$372.

Question

Quizplus · Accepted Answer

Using the FIFO method, the cost of goods sold would be $3,600 (10 units x $360 per unit) and the ending inventory would be valued at $1,980 (6 units x $330 per unit). 
Thus, the gross profit would be $2,620 ($6,000 - $3,600). 
After subtracting operating expenses of $1,200, Nueva's net income using FIFO would be $1,420 ($2,620 - $1,200). Therefore, the correct answer is D.

What Is Nueva's Net Income If It Elects FIFO