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JAMB Principles of Accounts 1997 Question 29

Question 29

Manufacturing Accounts

Given:
Direct material ₦10 000
Direct labour ₦5 000
Direct expenses ₦2 000
Factory overhead ₦4 000
What is the prime cost?

  1. A.₦21 000
  2. B.₦17 000
  3. C.₦15 000
  4. D.₦6 000
Show the answer and explanation

Answer: B (₦17 000)

Explanation

Prime cost = direct material + direct labour + direct expenses = 10 000 + 5 000 + 2 000 = ₦17 000.