Question on: JAMB Accounting - 2024
The following balances were extracted from the books of Oluwalambe Ltd, manufacturer, on 31st December 2007
| Stock of raw materials 1 - 1 - 2007 | 80000 |
| 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 |
Cost of goods produced is
A
#520,000
B
#530,000
C
#558,500
D
#559,000
Ask EduPadi AI for a detailed answer
Correct Option: C
To calculate the cost of goods produced:
1. Cost of Raw Materials Used
Opening Stock (8,000) + Purchases (450,000) − Closing Stock (95,000) = 363,000
2. Total Manufacturing Costs
- Raw Materials Used: 363,000
- Direct Wages: 65,000
- Indirect Wages: 28,000
- Depreciation: 32,000
- Factory Rent: 3,500
Total = 491,500
3. Cost of Goods Produced
Total Manufacturing Costs + Opening WIP (32,500) − Closing WIP (37,500)
= 491,500 + 32,500 − 37,500 = 486,500
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