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JAMB Principles of Accounts 1994 Question 26

Question 26

Manufacturing Accounts

Which of the following categories of labour cost will be classified as direct?

  1. A.accountant's salary
  2. B.factory workers' salary
  3. C.managing director's salary
  4. D.cashier's salary.
Show the answer and explanation

Answer: B (factory workers' salary)

Explanation

Direct labour is the wage of workers who actually make the product, i.e. the factory workers.