Use the following information to answer the given question Emeka Chukwudi (Nig.) Limited is a manufacturing company. Its books showed the following for the ...
Question 1 Report
Use the following information to answer the given question
Emeka Chukwudi (Nig.) Limited is a manufacturing company. Its books showed the following for the year ended 31st December, 1990
\(\begin{array}{c|c} \text{Opening stock - Raw materials} & 42,000 \\ \text{Purchases - Raw materials} & 265,000 \\ \text{Outwards} & 13,000 \\ \text{Returns outwards} & 13,000 \\ \text{Depreciation - plant and Machinery} & 10,000 \\ wages & 52,000 \\ \text{Closing stock - Raw materials} & 72,000 \\ \text{Direct expenses} & 11,000 \\ \text{Production Manager's salaries} & 18,000 \\ \text{Factory rent} & 15,000\end{array}\)
The factory overhead is
Emeka Chukwudi (Nig.) Limited is a manufacturing company. Its books showed the following for the year ended 31st December, 1990
\(\begin{array}{c|c} \text{Opening stock - Raw materials} & 42,000 \\ \text{Purchases - Raw materials} & 265,000 \\ \text{Outwards} & 13,000 \\ \text{Returns outwards} & 13,000 \\ \text{Depreciation - plant and Machinery} & 10,000 \\ wages & 52,000 \\ \text{Closing stock - Raw materials} & 72,000 \\ \text{Direct expenses} & 11,000 \\ \text{Production Manager's salaries} & 18,000 \\ \text{Factory rent} & 15,000\end{array}\)
The factory overhead is
Answer Details
In accounting, factory overhead refers to indirect costs that are associated with the manufacturing process. These costs cannot be directly traced to specific products, but are necessary for the production process to take place.
To calculate the factory overhead, we need to add up all the indirect costs associated with the manufacturing process. These costs are:
- Depreciation of plant and machinery: N10,000
- Production Manager's salaries: N18,000
- Factory rent: N15,000
Therefore, the total factory overhead is N10,000 + N18,000 + N15,000 = N43,000.
Hence, the correct option is "N43,000".
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