Transfers from the head office to branches are best carried out at__________

Assessment: JAMB UTME - Principles of Accounts - 2018 Subject: Financial Accounting

Question 1 Report

Transfers from the head office to branches are best carried out at__________
Answer Details
Transfers from the head office to branches are best carried out at cost plus mark-up. This is because cost plus mark-up allows the head office to recover the cost of producing the goods, and also make a profit to cover its own overheads and expenses. Selling price and market price may not be the best options because they do not take into account the actual cost of producing the goods, which could lead to overcharging or undercharging the branches. In contrast, cost plus mark-up ensures that the branches receive the goods at a fair price, while also allowing the head office to cover its own costs and make a profit. Overall, this method promotes transparency and fairness in the transfer process.
Read lesson note on Branch Accounts (JAMB)
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