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JAMB Principles of Accounts 2005 Question 27

Question 27

Manufacturing Accounts

A component of an overhead manufacturing cost is

  1. A.cost of work-in-progress
  2. B.cost of finished goods
  3. C.labour
  4. D.rent
Show the answer and explanation

Answer: D (rent)

Explanation

Factory overheads are indirect costs such as factory rent, lighting and indirect labour. Direct labour is prime cost, and work-in-progress is stock.