JAMB Principles of Accounts 2000 Question 18

Question 18

Manufacturing Accounts

Given:
(₦)
Depreciation of plant and machinery 1,600
Factory rent 650
Indirect wages 695
General indirect expenses 726
Lubricants 1235
Carriage inwards 829
Factory power 350
Bank charges 612
Carriage outwards 2,900
Determine the total factory overhead cost.

A.₦4,485
B.₦5,256
C.₦6,085
D.₦6,556.

Show the answer and explanation

Answer: B (₦5,256)

Explanation

Factory overheads = 1,600 + 650 + 695 + 726 + 1,235 + 350 = ₦5,256. Carriage inwards goes with materials; bank charges and carriage outwards are not factory costs.