Honesty Corporation’s shipments to and from its Quezon City branch are billed at 125% of cost. On December 31, 2021, QC branch reported the following data at billed price: Inventory January 1, P50,000; shipments received from home office, P1,000,000; shipments returned P100,000; and Inventory December 31, P300,000. The branch reported a net income of P250,000. How much is the adjusted branch net income?
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.
Honesty Corporation’s shipments to and from its Quezon City branch are billed at 125% of cost. On December 31, 2021, QC branch reported the following data at billed price: Inventory January 1, P50,000; shipments received from home office, P1,000,000; shipments returned P100,000; and Inventory December 31, P300,000. The branch reported a net income of P250,000.
How much is the adjusted branch net income?
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