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WAEC Financial Accounting 2019 Question 37

Question 37

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
Factory overhead cost is

  1. A.$25,000.
  2. B.$15,000.
  3. C.$12,000.
  4. D.$7,000.
Show the answer and explanation

Answer: C ($12,000.)

Explanation

Factory expenses 5,000 + rent 2,000 + depreciation 5,000 = $12,000.