You are provided with the following information for Swag

Diamonds #8622
You are provided with the following information for Swag Diamonds Ltd. Swag only carries one
brand and size of diamond-all are identical. Each batch of diamonds purchased is carefully
coded and marked with its purchase cost.Mar. 1 Beginning inventory is 140 diamonds at a cost
of $500 per diamond.3 Purchased 200 diamonds at a cost of $540 each.5 Sold 170 diamonds
for $800 each.10 Purchased 340 diamonds at a cost of $570 each.25 Sold 500 diamonds for
$850 each.Instructions(a) Assuming that Swag Diamonds uses the specific identification
method, do the following:1. Show how Swag Diamonds could maximize its gross profit for the
month by selecting which diamonds to sell on March 5 and March 25.2. Show how Swag
Diamonds could minimize its gross profit for the month by selecting which diamonds to sell on
March 5 and March 25.(b) Who are the stakeholders in this situation? Is there anything
unethical in choosing which diamonds to sell in a month?(c) Assuming that Swag Diamonds
uses a perpetual inventory system and the average cost method, how much gross profit would
Swag Diamonds report? (Round the average unit cost to the nearest cent-two decimal
places.)(d) Which method of cost determination-specific identification or average cost-should
Swag Diamonds select? Explain.View Solution:
You are provided with the following information for Swag Diamonds

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