JAMB Accounting 2007 Objective — Question 4

Question 4 of 46 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2007 Objective paper, with the correct answer and a full explanation.

Given: Stock at start - Raw material 57,000, Work-in-progress 42,000, Finished goods 71,000. Purchases of raw material amount to 81,000, direct labour is 88,000 and factory overhead 29,000. Calculate the prime cost.

A. #176,000Correct
B. #170,000
C. #167,000
D. 156,000

Explanation

Prime cost = Opening raw material stock + Purchases + Direct labour = 57,000 + 81,000 + 38,000 = #176,000 (prime cost excludes factory overhead).

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