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JAMB Principles of Accounts 2006 Question 32

Question 32

Departmental Accounts

Stationary Dept.: Sales ₦10 600; Cost of goods sold ₦5 247
Video Dept.: Sales ₦15 175; Cost of goods sold ₦6 704
The expenses incurred were rent ₦4 500, motor repairs ₦1 200 and telephone ₦900. The basis of cost apportionment is 2/3 stationary and 1/3 video.
Determine the net profit of the business.

  1. A.₦6 600
  2. B.₦6 271
  3. C.₦5 353
  4. D.₦7 224.
Show the answer and explanation

Answer: D (₦7 224.)

Explanation

Gross profit = (10 600 − 5 247) + (15 175 − 6 704) = 5 353 + 8 471 = ₦13 824. Expenses = 4 500 + 1 200 + 900 = ₦6 600. Net profit = ₦7 224.