Assignment Task: Assume that Blue Spruce Gems uses the specific identification cost flow method.
(1) How could Blue Spruce maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25?
To maximize gross profit, Blue Spruce should sell the diamonds with the lowest cost.
(2) How could Blue Spruce minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25?
To minimize gross profit, Blue Spruce should sell the diamonds with the highest cost.
Assume that Blue Spruce uses the FIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would Blue Spruce report under this cost flow assumption?