How do you calculate PRIME COST?

• Cost of Raw Materials Consumed plus Indirect Wages

• Cost of Raw Materials plus all Direct Costs

• Direct Costs plus Factory Overheads

• Factory Cost of Production plus Profit on Manufacture

Which of these are an example of a Direct Cost?

• Royalties

• Production Wages

• Depreciation of Factory Machinery

• Factory Insurance

How do you calculate Cost of Raw Materials Consumed?

• Opening Inventory of Finished Goods + Purchases - Closing Inventory of Finished Goods

• Closing Inventory of Raw Materials + Purchases - Opening Inventory of Raw Materials

• Opening Inventory of Raw Materials + Purchases - Closing Inventory of Raw Materials

• Purchases - Carriage In + Purchase Returns

Which of these is not an example of a Factory Overhead?

• Depreciation of Factory Machinery

• Factory Rates

• Factory Insurance

• Direct Expenses

Which column do Factory Overheads appear in?

• First

• Middle

• Last

In the Manufacturing Account which column would you find Opening and Closing Inventory?

• First

• Middle

• Last

Where do Warehouse Wages appear in the final accounts of a company who manufactures?

• Prime Cost section

• Trading Account

• Factory Overheads

• Any Other Income

Factory Cost of Production = £200,000 but Wholesale Value of Goods is £230,000. How should this be dealt with?

• Loss on Manufacture of £30,000 deducted from Gross Profit

• Profit on Manufacture of £30,000 added to Profit for the Year

• Profit on Manufacture of £30,000 added to Gross Profit

• Loss on Manufacture of £30,000 deducted from Profit for the Year

Rates of £10,000 should be shared 3:2 between the factory and the warehouse. How much should be entered into the Factory Overheads section of the Manufacturing Account.

• £3,000

• £4,000

• £5,000

• £6,000

Factory Cost of Production is £100,000. However a loss on manufacture of £5,000 was made. What is the Wholesale Value of Goods?

• £105,000

• £100,000

• £85,000

• £95,000