Blossom Specialty Company, a division of Lost World Inc., manufactures three mod

Question

Blossom Specialty Company, a division of Lost World Inc., manufactures three models of gear shift components for bicycles that are sold to bicycle manufacturers, retailers, and catalog outlets. Since beginning operations in 1993, Blossom has used normal absorption costing and has assumed a first-in, first-out cost flow in its perpetual inventory system. The balances of the inventory accounts at the end of Blossom's fiscal year, November 30, 2017, are shown below. The inventories are stated at cost before any year-end adjustments Finished goods Work in process Raw materials $644,000 118,400 285,400 72,200 Factory supplies The following information relates to Blossom's inventory and operations 1. The finished goods inventory consists of the items analyzed below Cost NRV Down tube shifter Standard model Click adjustment model Deluxe model $70,600 99,000 107,700 277,300 $70,000 93,100 109,600 272,700 Total down tube shifters Bar end shifter Standard model Click adjustment model 78,000 95,800 173,800 92,400 94,200 186,600 Total bar end shifters

Explanation / Answer

BLOSSOM SPECIALITY COMPANY

Balance Sheet

November 30, 2018

Finished goods Work in progress Raw material Factory supplies Down tube shifter at market cost 272700 Bar end shifter at cost 173800 Head tube shifters at cost 192900 Work In progress 98700 Deraileurs at market cost * 118917 Remaining items at market 118500 Supplies at cost ** 67600 Totals 639400 98700 237417 67600 * 285400 / 0.5 = 142700 / 1.2 = 118917 **72200 - 4600= 67600

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