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WAEC Financial Accounting 1996 Question 22

Question 22

Manufacturing Accounts

Which of the following is not part of prime cost of production?

  1. A.Cost of raw materials
  2. B.Carriage on raw materials
  3. C.Direct expenses
  4. D.Direct wages
  5. E.Depreciation of factory equipment
Show the answer and explanation

Answer: E (Depreciation of factory equipment)

Explanation

Prime cost is direct materials, direct labour and direct expenses; depreciation of factory equipment is a factory overhead.