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WAEC Financial Accounting 2000 Question 29

Question 29

Manufacturing Accounts

Opening Stock: raw materials N6,500; work-in-progress N2,500
Closing Stock: raw materials N4,000; work-in-progress N1,000
Purchases of raw materials N12,500
Manufacturing wages N2,000
Factory rent N500
What is the cost of production?

  1. A.N19,000
  2. B.N18,500
  3. C.N15,000
  4. D.N12,500
Show the answer and explanation

Answer: A (N19,000)

Explanation

Prime cost 17,000 + factory rent 500 + opening WIP 2,500 − closing WIP 1,000 = N19,000.