JAMB Accounting 2016 Objective — Question 40

Question 40 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2016 Objective paper, with the correct answer and a full explanation.

40. The difference between prime cost and cost of goods manufactured is the (a) factory overhead (b) cost of goods produced (c) factory depreciation (d) cost of raw materials used

A. factory overheadCorrect
B. cost of goods produced
C. factory depreciation
D. cost of raw materials used

Explanation

Cost of goods manufactured is the addition of prime cost and factory overhead. Thus, the difference between cost of goods manufactured and prime cost will give factory overhead.

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