During a financial year, Zenith Manufacturing Company recorded a total cost of production of . The company transfers finished goods to the trading account at market value, which reflects a mark-up of on the cost of production. What is the amount of manufacturing profit in Naira to be credited to the Profit and Loss Account for the year?
Answer: 120000 Naira
Answer
The manufacturing profit credited to the Profit and Loss Account is N120,000.
Manufacturing profit is calculated by applying the profit mark-up percentage to the cost of production: 25% of N480,000 = N120,000.
Step-by-Step Solution
Key Concept
Manufacturing profit is the mark-up added to the cost of production when transferring finished goods to the trading account at market value.