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WAEC Financial Accounting 2011 Question 24

Question 24

Manufacturing Accounts

Prime cost is derived by adding I. cost of raw materials consumed; II. indirect expenses; III. direct labour; IV. factory expenses; V. work-in-progress; VI. direct expenses.

  1. A.I, II and IV only
  2. B.I, III and VI only
  3. C.IV, V and VI only
  4. D.II, III and V only
Show the answer and explanation

Answer: B (I, III and VI only)

Explanation

Prime cost = direct materials + direct labour + direct expenses.