The following balances was exgtracted from the books of Oluwalambe Ltd, manufacturer, on 31st December 2007...

The following balances was exgtracted from the books of Oluwalambe Ltd, manufacturer, on 31st December 2007...

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The following balances was exgtracted 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

Factory overhead cost is

A. #63,500
B. #68,500
C. #58,500
D. #12,800

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Correct Answer: Option A

Explanation

Factory Overhead Cost = Indirect Wages + Depreciation on Plants + Factory Rent
Factory Overhead Cost = #28,000 + #32,000 + #3,500
Factory Overhead Cost = #63,500

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