The head office usually issues goods to branches at
Answer Details
When the head office issues goods to branches, the usual cost that is recorded for accounting purposes is the cost price of the goods. The cost price of goods is the total cost incurred to acquire or produce them, including all direct and indirect costs such as raw materials, labor, and overhead expenses.
Using the cost price of goods allows the head office to accurately track the cost of goods sold and the value of inventory held by the branches. It also ensures that the branches are charged a fair price for the goods that they receive from the head office.
While other methods such as prime cost, production cost, and net realizable value may also be used to value goods, cost price is the most commonly used method when issuing goods to branches. This is because it provides a straightforward and reliable method for calculating the value of goods, and it is consistent with the accounting principle of cost allocation.