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JAMB Principles of Accounts 1995 Question 26

Question 26

Manufacturing Accounts

Given:
Prime cost ₦220 000
Factory cost ₦32 000
Work in progress at beginning ₦25 000
Work in progress at close ₦19 000
Administrative expenses ₦21 000
Determine the production cost

  1. A.₦296 000
  2. B.₦277 000
  3. C.₦258 000
  4. D.₦246 000.
Show the answer and explanation

Answer: C (₦258 000)

Explanation

Production cost = prime cost 220 000 + factory cost 32 000 + opening WIP 25 000 − closing WIP 19 000 = ₦258 000. Administrative expenses go to the profit and loss account.