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Maxlight Company buys transformers from manufacturers and sells them to utility companies. The units are costly and the company keeps track of them by
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 2010901 2010905 Unit Cost $ 57.000 73,000 Unit Cost S 63,000 70,000 During the month, the company purchased the following two transformens Serial Number 20101001 20101002 Maxlight Company sold two transformers-serial numbers 2010905 and 20101002-during the month of April. The selling price of the transformers was $100,000 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. Maxight Company uses the specific-unit-cost method for costing inventory. Why would the company prefer to use this method? Companies that have relatively high value inventory items and relatively high levels of income will often use the specific-unit-cost method. It is the most accurate measure of matching the cost of inventory with the revenue it generates Requirement 2. Compute the gross margin for Micdight Company for the month of April What is the gross margin for Apri?
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