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WAEC Financial Accounting 1997 Question 42

Question 42

Manufacturing Accounts

Which of the following is a factory overhead?

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

Answer: E (Depreciation of factory equipment.)

Explanation

Depreciation of factory equipment is an indirect factory cost; the others are part of prime cost.