The following balances was extracted from the books of Oluwalambe Ltd, manufacturer, on 31st December 2007
| Stock of raw materials 1 – 1 – 2007 | 8000 |
|
Purchase of raw materials |
450000 |
|
Stock of raw materials 31 – 12 – 2007 |
95000 |
|
Direct wages |
65000 |
|
Indirect wages |
28000 |
|
Depreciation on plants |
32000 |
|
Factory rent |
3500 |
|
Work in progress 1- 1- 2007 |
32500 |
|
Work in progress 31 – 12- 2007 |
37500 |
Cost of goods produced is
- #520,000
- #530,000
-
#558,500
- #559,000
The correct answer is: C
Explanation
Cost of Goods Produced = Prime Cost + Factory Overhead Cost + Opening Work in Progress - Closing Work in Progress
Prime Cost: #500,000 (from previous question) Factory Overhead Cost: #63,500 (from previous question)
Cost of Goods Produced = #500,000 + #63,500 + #32,500 - #37,500
Cost of Goods Produced = #558,500