A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be A. $65. B. $60. C. $75. D. $50. The accountant at Patton Company has determined that income before income taxes amounted to $8,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption? A. $7,000 B. $7,700 C.$8,300 D. $9,000 Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson County: A. may be losing sales due to inventory shortages. B. has a cost of goods sold that is increasing relative to its average inventory. C. is minimizing funds tied up in inventory. D. is increasing the amount of inventory on hand relative to sales. The following information was available for Bowyer Company at December 31, 2010: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Bowyer's inventory turnover ratio in 2010 was A. 8.3 times. B. 7.3 times. C. 6.0 times. D. 9.4 times. An assumption about cost flow is necessary A. even when there is no change in the purchase price on inventory. B. only when the flow of goods cannot be determined. C. because it is required by the income tax regulation. D. because prices usually change, and tracking which units have been sold is difficult