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

Multiple Choice

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.