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WAEC Financial Accounting 1998 Question 42

Question 42

Manufacturing Accounts

Opening stock of Raw Materials: N5,800
Closing stock of Raw Materials: N4,500
Raw Materials Purchased: N19,000
Carriage outwards: N1,300
Direct labour: N4,000
Electricity (Factory): N2,500
Supervisor's salary: N5,500
Depreciation of Plant: N1,500
Sales: N58,000
Closing stock (Finished Goods): N4,500
Administrative Expenses: N5,500
Selling and Distribution Expenses: N3,000
The prime cost is

  1. A.N26,800
  2. B.N25,600
  3. C.N24,300
  4. D.N20,300
  5. E.N19,000.
Show the answer and explanation

Answer: C (N24,300)

Explanation

Prime cost = materials 20,300 + direct labour 4,000 = N24,300.