passwella.
Menu

WAEC Financial Accounting 2019 Question 36

Question 36

Manufacturing Accounts

Use the following information to answer questions 36 and 37.
Cost of raw materials available: $32,000
Manufacturing wages: $10,000
Factory expenses: $5,000
Royalty: $3,000
Factory rent: $2,000
Depreciation of plant and machinery: $5,000
Closing stock of raw materials: $3,000
The prime cost is

  1. A.$57,000.
  2. B.$45,000.
  3. C.$42,000.
  4. D.$39,000.
Show the answer and explanation

Answer: C ($42,000.)

Explanation

Materials used (32,000 − 3,000 = 29,000) + wages 10,000 + royalty 3,000 = $42,000.