JAMB Principles of Accounts 1995 Question 27

Question 27

Manufacturing Accounts

The factory cost of goods produced is made up of

  1. A.prime cost and factory overhead
  2. B.prime cost and office overhead
  3. C.raw materials consumed and fixed cost
  4. D.raw materials and administrative overhead.
Show the answer and explanation

Answer: A (prime cost and factory overhead)

Explanation

Factory (production) cost = prime cost (direct costs) + factory overheads.