JAMB Accounts Principles of Accounts 2012 Paper

Concept:Manufacturing profit is the excess of total sales revenue over the total production cost.Explanation:First, calculate total sales revenue.Selling price per unit is $₦120$ and production volume is $4000$ units.Total sales revenue $= 4000 \times 120 = ₦480,000$.Then subtract total production cost from total sales revenue.Manufacturing profit $= ₦480,000 - ₦360,000 = ₦120,000$.The factory overhead cost of $₦56,000$ is already part of production cost, so it is not subtracted again.Answer:Total manufacturing profit is $₦120,000$.Correct option: B. ₦120,000.