Klash Company Adopted a Standard Cost System Several Years Ago

question 164

Essay

Klash Company adopted a standard cost system several years ago. The company uses standard costs for all 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: Required:
1. Calculate the standard cost of the actual kilograms of material purchased; round your answer to the nearest whole dollar.
2. Calculate the total standard kilograms (SQ) allowed 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; round your answer to nearest whole dollar.
4. Calculate the actual price (AP) (to two decimal places) per kilogram of material of material purchased this period.
5. Calculate the direct labor rate variance rounded to the nearest whole dollar.

Comprehend the consolidation process including elimination of unrealized profits in intercompany transactions.

Grasp the equity method of accounting and its implications in the consolidation process.

Identify and adjust the fair values of acquired assets and liabilities in business combinations.

Understand the accounting treatment of dividends received from subsidiaries.

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Definitions:

Current Ratio

A financial metric that evaluates a corporation's capacity to meet its obligations due within a year by comparing its current assets to its current liabilities.

Financial Data

Information related to the financial activities of an entity, including income statements, balance sheets, cash flow statements, and more.

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's earnings distributed to shareholders as dividends.

Market Price

The amount of money a buyer is willing to pay for a good or service in a competitive marketplace.