Response to the following problem:
Czar Nicholas Chocolatier, Ltd. , makes premium handcrafted chocolate confections in London. The owner of the company is setting up a standard cost system and has collected the following data for one of the company's products, the Imperial Truffle. This product is made with the fi nest white chocolate and various fillings. The data below pertain only to the white chocolate used in the product. (The currency in the United Kingdom is the pound, which is denoted by £.):
Material requirements, kilograms of white chocolate per dozen truffles . . . . . . 0.80 kilograms
Allowance for waste, kilograms of white chocolate per dozen truffles. . . . . . . . 0.02 kilograms
Allowance for rejects, kilograms of white chocolate per dozen truffles . . . . . . . 0.03 kilograms
Purchase price, fi nest grade white chocolate . . . . . . . . . . . . . . . . . . . . . . . . £9.00 per kilogram
Purchase discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% of purchase price
Shipping cost from the supplier in Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . £0.20 per kilogram
Receiving and handling cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £0.05 per kilogram
Required:
1. Determine the standard price of a kilogram of white chocolate.
2. Determine the standard quantity of white chocolate for a dozen truffles.
3. Determine the standard cost of the white chocolate in a dozen truffles.