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JAMB Principles of Accounts 1999 Question 27

Question 27

Manufacturing Accounts

The difference between the factory cost of production and the prime cost of production is

  1. A.direct materials
  2. B.direct labour
  3. C.selling expenses
  4. D.overhead.
Show the answer and explanation

Answer: D (overhead.)

Explanation

Factory cost = prime cost + factory overheads, so the difference is overhead.