Test Index

WAEC Accounting 2011 Paper

Question : 26

Total: 47

\text{ NGN}

\text{ --- } \; \text{Prime cost} \; \& 4,000

\text{ } \; \text{Factory overheads} \; \text{\& } 6,000

\text{ } \; \text{Stock on 1/1/09 work-in-progress} \; \text{\& 1,000}

\text{ } \; \text{Stock on 31/12/09 work-in-progress} \; 2,000

\text{ } \; \text{Returns inwards} \; 800

\text{ } \; \text{Sales} \; \& 20,000

Cost of production is

Solution:

Concept:

Cost of production is found by adding prime cost and factory overheads, then adjusting for the changes in work-in-progress stock.

Explanation:

Cost of production

=

Prime cost

+

Factory overheads

+

Opening work-in-progress

-

Closing work-in-progress.

Substitute the given values:

4,000 + 6,000 + 1,000 - 2,000 = 9,000

Sales and returns inwards are not used in this calculation.

Answer:

\text{N9,000}

(Option B).

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