JAMB Accounting Past Questions & Answers - Page 124

616.

In manufacturing account, the work-in-progress at the end of the year is

A.

Deducted from the cost of goods completed during this year

B.

Added to the cost of goods completed

C.

Stated in the profit and loss account

D.

Stated in the prime cost section

Correct answer is A

Work in progress for the year is gotten by = WIP beginning balance + manufacturing costs - the cost of goods completed.

618.

Opening stock of raw materials - #75,000
Purchase of raw materials - #330,000
Closing stock of raw materials - #80,000
Direct wages - #30,000
Carriages of raw materials - #10,000

Calculate the cost of raw materials used.

A.

#495,000

B.

#415,000

C.

#325,000

D.

#305,000

Correct answer is C

To calculate direct materials, add beginning direct materials to direct materials purchases and subtract ending direct materials.

75,000 + 330,000 - 80,000 = 325,000

619.

The addition of prime cost, indirect cost and opening work-in-progress less the closing work-in-progress will result in cost of

A.

Goods available for sale

B.

Goods sold

C.

Goods manufactured

D.

Materials put into production

Correct answer is C

The cost of goods manufactured equation is calculated by adding the total manufacturing costs; including all direct materials, direct labor, and factory overhead; to the beginning work in process inventory and subtracting the ending goods in process inventory.

 

620.

When goods produced are transferred at cost plus mark-up sale, the difference between the cost and the transferred price is a

A.

Discount

B.

Sales commission

C.

Manufacturing profit

D.

Factory reserves

Correct answer is C

The Manufacturing Profit, is the excess of transfer value of goods manufactured over their actual production cost.