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JAMB Principles of Accounts 2002 Question 30

Question 30

Manufacturing Accounts

The gross profit on manufactured goods is the difference between the cost of goods manufactured and the

  1. A.market value of goods produced
  2. B.prime cost of production
  3. C.indirect cost of production
  4. D.goods produced.
Show the answer and explanation

Answer: A (market value of goods produced)

Explanation

Manufacturing profit compares what it would cost to buy the goods (market value) with what it cost to make them.