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You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (2) To maximize gross profit, Blossom Company should sell the diamonds with the cost. Demonstrate how Blossom Company could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25. To minimize gross profit, Blossom Company should sell the diamonds with the cost. Cost of goods sold to maximize gross profit $ Cost of goods sold to minimize gross profit $

You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (2) To maximize gross profit, Blossom Company should sell the diamonds with the cost. Demonstrate how Blossom Company could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25. To minimize gross profit, Blossom Company should sell the diamonds with the cost. Cost of goods sold to maximize gross profit $ Cost of goods sold to minimize gross profit $

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 51E: Inventory Costing Methods On June 1, Welding Products Company had a beginning inventory of 210 cases...
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You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (2) To maximize gross profit, Blossom Company should sell the diamonds with the cost. Demonstrate how Blossom Company could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25. To minimize gross profit, Blossom Company should sell the diamonds with the cost. Cost of goods sold to maximize gross profit $ Cost of goods sold to minimize gross profit $
Transcribed Image Text:You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (2) To maximize gross profit, Blossom Company should sell the diamonds with the cost. Demonstrate how Blossom Company could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25. To minimize gross profit, Blossom Company should sell the diamonds with the cost. Cost of goods sold to maximize gross profit $ Cost of goods sold to minimize gross profit $
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