Maxlight

Company buys transformers from manufacturers and sells them to utility companies. The units are costly and the company keeps track of them by using serial numbers. On April 1, the company had two transformers in stock.

	Serial Number	Unit Cost
	2010901	$67,000
	2010905	$69,000

During the month, the company purchased the following two transformers.

	Serial Number	Unit Cost
	20101001	$65,000
	20101002	$74,000

Maxlight

Company sold two

transformersserial

numbers 2010905 and

20101002during

the month of April. The selling price of the transformers was

$104,000

per unit.

Required

1.	Maxlight Company uses the specific-unit-cost method for costing inventory. Why would the company prefer to use this method?
2.	Compute the gross margin for Maxlight Company for the month of April.

Requirement 1. Maxlight Company uses the specific-unit-cost method for costing inventory. Why would the company prefer to use this method? Maxlight Company buys transformers from manufacturers and sells them to utility companies. The units are costly and the company keeps track of them by using serial numbers. On April 1, the company had two transformers in stock. Serial Number Unit Cost 2010901 $ 67,000 2010905 $ 69,000 During the month, the company purchased the following two transformers. Serial Number Unit Cost 20101001 $ 65,000 20101002 $ 74.000 Maxlight Company sold two transformersserial numbers 2010905 and 20101002during the month of April. The selling price of the transformers was $104,000 per unit Companies that have value inventory items and V levels of income will often use the specific-unit-cost method. It is the accurate measure of matching the cost of inventory with the revenue it generates. Requirement 2. Compute the gross margin for Maxlight Company for the month of April. Gross margin for the month of April is $0. Required 1. Maxlight Company uses the specific-unit-cost method for costing inventory. Why would the company prefer to use this method? 2. Compute the gross margin for Maxlight Company for the month of April