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WAEC Financial Accounting 2012 Question 12

Question 12

Manufacturing Accounts

The addition of prime cost and factory overheads is

  1. A.total factory overheads.
  2. B.market value of goods produced.
  3. C.cost of goods produced.
  4. D.work-in-progress.
Show the answer and explanation

Answer: C (cost of goods produced.)

Explanation

Prime cost plus factory overheads gives the production (factory) cost, i.e. the cost of goods produced.