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JAMB Principles of Accounts 2012 Question 30

Question 30

Manufacturing Accounts

Total production cost ₦360,000
Factory overhead cost ₦56,000
Selling price per unit ₦120
Production volume 4 000 units
Determine the value of prime cost.

  1. A.₦416,000
  2. B.₦304,000
  3. C.₦240,000
  4. D.₦184,000.
Show the answer and explanation

Answer: B (₦304,000)

Explanation

Prime cost = total production cost − factory overheads = 360 000 − 56 000 = ₦304 000.