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JAMB Principles of Accounts 2017 Question 28

Question 28

Manufacturing Accounts

Use the information below to answer questions 27 and 28.
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.₦597000
  2. B.₦567000
  3. C.₦579000
  4. D.₦576000
Show the answer and explanation

Answer: C (₦579000)

Explanation

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