JAMB - Accounts Principles Of Accounts (2024 - No. 73)
The following balances was exgtracted from the books of Oluwalambe Ltd, manufacturer, on 31st December 2007
| Stock of raw materials 1 - 1 - 2007 | 8000 |
|
Purchase of raw materials |
450000 |
|
Stock of raw materials 31 - 12 - 2007 |
95000 |
|
Direct wages |
65000 |
|
Indirect wages |
28000 |
|
Depreciation on plants |
32000 |
|
Factory rent |
3500 |
|
Work in progress 1- 1- 2007 |
32500 |
|
Work in progress 31 - 12- 2007 |
37500 |
The prime cost is
#500,000
#527,500
#530,000
#463,000
Explanation
Prime Cost = Direct Materials Cost + Direct Labor Cost
Direct Materials Cost (Cost of Raw Materials Consumed): We have already calculated this in the previous question and found it to be #435,000
Prime Cost = #435,000 (Direct Materials) + #65,000 (Direct Labor)
Prime Cost = #500,000
Direct Materials Cost (Cost of Raw Materials Consumed): We have already calculated this in the previous question and found it to be #435,000
Prime Cost = #435,000 (Direct Materials) + #65,000 (Direct Labor)
Prime Cost = #500,000
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