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.

Question

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The Answer of 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.

Nichols Company Had 500 Units of "Dink" in Its Inventory