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JAMB Principles of Accounts 2013 Question 31

Question 31

Manufacturing Accounts

Which of the following expenses relates to the profit and loss account of a manufacturing firm?

  1. A.Direct materials.
  2. B.Direct labour.
  3. C.Administrative overhead
  4. D.Work-in-progress.
Show the answer and explanation

Answer: C (Administrative overhead)

Explanation

Administrative overheads are office costs charged to profit and loss; the others belong in the manufacturing account.