Klash Company Adopted a Standard Cost System Several Years Ago

question 6

Essay

Klash Company adopted a standard cost system several years ago. The company uses standard costs for all of its inventories. The standard costs for direct materials and labor for its single product are as follows: Materials (12 kilograms/unit × $7.00/kilogram) = $84.00/unit; direct labor (8 hours/unit × $12.00/hour) = $96.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: Note: number of kilograms issued to production during the period = number of kilograms purchased.
Required:
1. Calculate the standard cost of the actual kilograms of material purchased.
2. Calculate the total standard kilograms for the production of the period (that is, for "equivalent units produced with respect to direct materials")
3. Calculate the total standard cost of materials for the production of the period.
4. Calculate the actual price per kilogram of material of material purchased this period.
5. Calculate the direct labor rate variance.

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Definitions:

Options Pricing Model

A mathematical formula or model used to determine the theoretical price of options contracts by accounting for various factors, including the stock price, strike price, volatility, time to expiration, and risk-free interest rate.

Treasury Stock

Treasury stock consists of shares that were issued and subsequently reacquired by the issuing company, thereby reducing the amount of outstanding stock on the open market.

Acquire Treasury Stock

This refers to the purchase of a company's own shares from the market, which reduces the amount of outstanding stock.

Earnings Per Share

A common financial metric used to indicate the profitability of a company on a per-share basis, calculated as net income divided by the number of outstanding shares.