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WAEC Financial Accounting 2005 Question 7

Question 7

Manufacturing Accounts

Which of the following is an example of direct expense?

  1. A.Royalties
  2. B.Carriage inwards
  3. C.Carriage outwards
  4. D.Manufacturing wages.
Show the answer and explanation

Answer: A (Royalties)

Explanation

Royalties paid per unit produced are a direct expense; manufacturing wages are direct labour, not a direct expense.