EXAM 3 ACCT 301-003

Which inventory costing method assumes that items sold are those that were acquired first?

FIFO

Rudy Company reports gross sales revenue of $5.2 million, net sales revenue of $5 million, and cost of goods sold of $3 million. Rounding to the nearest percent, the company's gross profit ratio would be

GPR = GP/NET SALES (5-3)/5=40%

Assuming that prices rise over time, which inventory cost flow assumption will result in the lowest pretax income?

LIFO