Consolidated Statements for X, Y, and Z Are Proper If

question 10

Multiple Choice

Consolidated statements for X, Y, and Z are proper if

• A)​X owns 100% of the outstanding common stock of Y and 49% of Z; M owns 51% of Z.
• B)​X owns 100% of the outstanding common stock of Y and 75% of Z; X bought the stock of Z one month before the statement date and sold it 6 weeks later.
• C)​X owns 100% of the outstanding stock of Y; Y owns 75% of Z.
• D)​There is no interrelation of financial control among X, Y, and Z; however, they are contemplating the joint purchase of 100% of the outstanding stock of D.

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Definitions:

Product Costing

The method used to determine the expenses associated with producing a product, considering factors like raw materials, labor, and overhead costs.

Factory Overhead

Indirect costs related to manufacturing, including costs associated with operating the factory like utilities and salaries, but excluding direct materials and direct labor.

Indirect Materials

Materials used in the production process that cannot be directly linked to specific products or jobs, such as lubricants for machinery.

Materials Requisitions

Requests or orders for company materials to be used in production, indicating types, amounts, and intended use.