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JAMB Principles of Accounts 2012 Question 29

Question 29

Manufacturing Accounts

Total production cost ₦360,000
Factory overhead cost ₦56,000
Selling price per unit ₦120
Production volume 4 000 units
What is the total manufacturing profit?

  1. A.₦64,000
  2. B.₦120,000
  3. C.₦360,000
  4. D.₦480,000.
Show the answer and explanation

Answer: B (₦120,000)

Explanation

Market value of goods made = 4 000 × 120 = ₦480 000. Manufacturing profit = 480 000 − 360 000 = ₦120 000.