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WAEC Financial Accounting 2006 Question 32

Question 32

Manufacturing Accounts

Opening stock: raw materials D10,000; work-in-progress D16,000
Purchases of raw materials D95,500
Direct labour wages paid D13,500
Royalties paid D6,200
Accrued wages D2,800
Closing stock: raw materials D7,500; work-in-progress D8,500
Manufacturing overhead D10,000
Prime cost is

  1. A.D120,500
  2. B.D117,700
  3. C.D114,900
  4. D.D114,300.
Show the answer and explanation

Answer: A (D120,500)

Explanation

98,000 + wages (13,500 + 2,800 accrued) + royalties 6,200 = D120,500.