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JAMB Principles of Accounts 2008 Question 30

Question 30

Manufacturing Accounts

Stock of materials 1/1 ₦10 000
Purchase of raw materials ₦160 000
Manufacturing wages ₦420 000
Royalties ₦3 000
Stock of raw materials 31/12 ₦14 000
Calculate the prime cost

  1. A.N597000
  2. B.N579000
  3. C.N576000
  4. D.N567000
Show the answer and explanation

Answer: B (N579000)

Explanation

Prime cost = materials consumed 156 000 + manufacturing wages 420 000 + royalties 3 000 = ₦579 000.