₦Manufacturing wages42,000Factory rent880Raw materials: Stock 1/1/161,000Purchases16,000Stock 31/12/161,400Depreciation of Plants and…

JAMB Accounting 2023 50 views

₦Manufacturing wages42,000Factory rent880Raw materials: Stock 1/1/161,000Purchases16,000Stock 31/12/161,400Depreciation of Plants and…

₦
Manufacturing wages 42,000
Factory rent 880
Raw materials: Stock 1/1/16 1,000
Purchases 16,000
Stock 31/12/16 1,400
Depreciation of Plants and Machinery 800
Royalties 300
Indirect wages 18,000
General indirect expenses 620

Calculate the cost of raw materials consumed

  1. ₦42,000
  2. ₦20,300
  3. ₦17,000
  4. ₦15,600 ✓

Explanation

Raw materials consumed = Opening stock + Purchases – Closing stock. Calculate: ₦1,000 + ₦16,000 – ₦1,400 = ₦15,600. This shows how much raw material was actually used in production.

Manufacturing wages, factory rent, and other costs are separate from raw materials. They’re added later to calculate total manufacturing cost.

Formula to remember: Opening stock + Purchases – Closing stock = Materials consumed.

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