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JAMB Principles of Accounts 2003 Question 28

Question 28

Manufacturing Accounts

Use the information below to answer questions 28 and 29.
PQ Manufacturing Company (₦)
Raw materials (1/1/2001) 3 500
Raw materials (31/12/2001) 4 900
Purchase of raw materials 56 000
Salary 63 000
Wages 148 050
Factory lighting 3 080
Plant Depreciation 2 800
Factory Insurance 2 170
The overhead cost is

  1. A.₦71 050
  2. B.₦68 250
  3. C.₦67 970
  4. D.₦66 080
Show the answer and explanation

Answer: A (₦71 050)

Explanation

Overheads = salary 63 000 + lighting 3 080 + plant depreciation 2 800 + insurance 2 170 = ₦71 050 (wages are direct labour).