DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details: Cost of sales Direct materials P30,000,000 Direct labor 20,000,000 Manufacturing overhead 10,000,000 Operating expenses Salaries and wages P7,000,000 Taxes 300,000 Depreciation 3,500,000 Professional fees 200,000 Advertising expense 3,000,000 Training expenses 3,000,000 Office supplies 500,000 How much is the taxable net income of the company?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details:
|
Cost of sales |
|
|
Direct materials |
P30,000,000 |
|
Direct labor |
20,000,000 |
|
Manufacturing |
10,000,000 |
|
|
|
|
Operating expenses |
|
|
Salaries and wages |
P7,000,000 |
|
Taxes |
300,000 |
|
|
3,500,000 |
|
Professional fees |
200,000 |
|
Advertising expense |
3,000,000 |
|
Training expenses |
3,000,000 |
|
Office supplies |
500,000 |
How much is the taxable net income of the company?
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