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WAEC Financial Accounting 2011 Question 28

Question 28

Manufacturing Accounts

Use the following information to answer questions 28 and 29.
Prime cost: ₦4,000
Factory overheads: ₦6,000
Stock on 1/1/09 work-in-progress: ₦1,000
Stock on 31/12/09 work-in-progress: ₦2,000
Returns inwards: ₦800
Sales: ₦20,000

Cost of production is

  1. A.₦10,000
  2. B.₦9,000
  3. C.₦8,000
  4. D.₦6,000
Show the answer and explanation

Answer: B (₦9,000)

Explanation

Prime cost 4,000 + overheads 6,000 + opening WIP 1,000 − closing WIP 2,000 = ₦9,000.