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Mencon Company buys transformers from manufacturers and sells them to utility companies. The units are costly and the company keeps track of them by using
Mencon 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. Next Question Serial Number Unit Cost Requirement 1. Mencon Company uses the specific-unit-cost method for costing inventory. Why would the company prefer to use this method? 2010901 $ 61,000 2010905 $ 75,000 During the month, the company purchased the following two transformers. Serial Number Unit Cost Companies that have value inventory items and levels of income will often use the specific-unit-cost method. It is the Vaccurate measure of matching the cost of inventory with the revenue it generates. Requirement 2. Compute the gross margin for Mencon Company for the month of April. Gross margin for the month of April is $ 20101001 $ 51,000 20101002 $ 72,000 Mencon Company sold two transformers-serial numbers 2010905 and 20101002during the month of April. The selling price of the transformers was $100,000 per unit. Required 1. Mencon 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 Mencon Company for the month of April
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