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JAMB Principles of Accounts 2013 Question 32

Question 32

Manufacturing Accounts

I. Direct materials
II. Direct labour
III. Direct expenses
IV. Factory expenses
Prime cost consist of

  1. A.I, II and III.
  2. B.I, II and IV.
  3. C.I, III and IV.
  4. D.II, III and IV.
Show the answer and explanation

Answer: A (I, II and III.)

Explanation

Prime cost is the total of direct costs: materials, labour and direct expenses.