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WAEC Financial Accounting 2023 Question 2

Question 2

Manufacturing Accounts

A crane hired by a building construction company would be classified as

  1. A.a financial cost.
  2. B.a direct manufacturing cost.
  3. C.an overhead cost.
  4. D.an administration cost.
Show the answer and explanation

Answer: B (a direct manufacturing cost.)

Explanation

Hire of special plant used directly on the construction job is a direct expense, part of direct (prime) cost.