Accounting 2024 – Question 5

Q: Accounting 2024 – Question 5

Accounting 2024 - Question 5 ₦Stock 1/1/09: Raw materials20000Work -in-progress5000Stock 31/12/09: Raw materials500Work -in-progress4000Raw materials purchased18000Direct labour7500Direct expenses3000Factory expenses10000 The raw materials available for production is ₦38,000 ✓ ₦20,000 ₦19,500 18,500 Explanation Raw materials available for production represents all the materials a factory could potentially use during a period. This includes what was already in the warehouse plus new purchases. The formula is: Opening Raw Materials Stock + Raw Materials Purchased. From the data: Opening stock of raw materials on 1/1/09 = ₦20,000. Raw materials purchased during the year = ₦18,000. Calculation: ₦20,000 + ₦18,000 = ₦38,000. This figure differs from raw materials consumed. Available materials include everything the company could have used. Consumed materials would subtract the closing stock (what remained unused). Work-in-progress, labour, and factory expenses are separate cost elements and are not included in this calculation.

JAMB Accounting 2024 Medium 👁 10 views

	₦
Stock 1/1/09: Raw materials	20000
Work -in-progress	5000
Stock 31/12/09: Raw materials	500
Work -in-progress	4000
Raw materials purchased	18000
Direct labour	7500
Direct expenses	3000
Factory expenses	10000

The raw materials available for production is

₦38,000 ✓
₦20,000
₦19,500
18,500

Explanation

Raw materials available for production represents all the materials a factory could potentially use during a period. This includes what was already in the warehouse plus new purchases.

The formula is: Opening Raw Materials Stock + Raw Materials Purchased. From the data: Opening stock of raw materials on 1/1/09 = ₦20,000. Raw materials purchased during the year = ₦18,000.

Calculation: ₦20,000 + ₦18,000 = ₦38,000.

This figure differs from raw materials consumed. Available materials include everything the company could have used. Consumed materials would subtract the closing stock (what remained unused). Work-in-progress, labour, and factory expenses are separate cost elements and are not included in this calculation.