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WAEC Financial Accounting 2017 Question 24

Question 24

Manufacturing Accounts

Production cost of a manufacturing firm is made up of

  1. A.indirect materials and prime cost.
  2. B.factory overheads and prime cost.
  3. C.direct materials and wages.
  4. D.factory overheads and direct materials.
Show the answer and explanation

Answer: B (factory overheads and prime cost.)

Explanation

Cost of production = prime cost + factory overheads.