Valuation and Adjustment for Work-in-Progress (WIP) Practice Questions — JAMB UTME

Question 1Question →

The following figures were extracted from the books of Ade & Sons Manufacturing Enterprises for the financial year ended 31st December 2025:

- Direct materials used: ₦145,000
- Direct labor cost: ₦65,000
- Factory overhead expenses: ₦38,000
- Opening work-in-progress (1st Jan 2025): ₦22,000
- Closing work-in-progress (31st Dec 2025): ₦27,000

What is the total cost of production for the year?

Show answer & explanation

Answer: 243000

Answer

The total cost of production for the year is ₦243,000.

To calculate the total cost of production, add direct materials consumed (₦145,000) and direct labor (₦65,000) to find the prime cost of ₦210,000. Add factory overhead expenses (₦38,000) to obtain the gross cost of production of ₦248,000. Finally, add opening work-in-progress (₦22,000) and subtract closing work-in-progress (₦27,000) to arrive at the net cost of production of ₦243,000.

Step-by-Step Solution

1

Calculate Prime Cost

₦210,000

Prime cost is the sum of all direct manufacturing costs, including direct materials consumed and direct labor.

2

Add Factory Overheads

₦248,000

Factory overheads represent indirect factory costs incurred during the manufacturing process.

3

Adjust for Opening and Closing Work-in-Progress

₦243,000

Opening WIP is added because it represents partially finished goods from the previous period completed in the current period. Closing WIP is deducted because it represents partially finished goods that are not yet complete at year-end.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP) in Manufacturing Accounts

Question 2Question →

In a manufacturing entity, the prime cost for a financial period is $\text{₦}50,000$ and factory overheads total $\text{₦}20,000$ . If the opening work-in-progress is valued at $\text{₦}5,000$ and the closing work-in-progress is $\text{₦}3,000$ , what is the cost of production?

Show answer & explanation

Answer: 72000

Answer

The cost of production is

\text{₦}72,000

.

The cost of production is determined by summing prime cost and factory overheads, adding opening work-in-progress, and subtracting closing work-in-progress:

\text{₦}50,000 + \text{₦}20,000 + \text{₦}5,000 - \text{₦}3,000 = \text{₦}72,000

.

Step-by-Step Solution

1

Calculate the total factory expenditure prior to work-in-progress adjustments by adding factory overheads to prime cost.

\text{₦}50,000 + \text{₦}20,000 = \text{₦}70,000

Prime cost and factory overheads together represent the current period manufacturing inputs.

2

Add the valuation of opening work-in-progress.

\text{₦}70,000 + \text{₦}5,000 = \text{₦}75,000

Opening work-in-progress consists of partially completed goods carried over from the prior period that were completed in the current period.

3

Deduct the valuation of closing work-in-progress.

\text{₦}75,000 - \text{₦}3,000 = \text{₦}72,000

Closing work-in-progress consists of uncompleted goods at the end of the period that must be deferred to the subsequent period.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP)

Question 3Question →

The accounting records of Bamidele Manufacturing Ltd for the year ended 31 December 2025 reveal the following financial data:

Cost Item	Amount ( $\text{₦}$ )
Direct raw materials consumed	$180,000$
Direct wages paid (includes $\text{₦}10,000$ paid in advance for 2026)	$90,000$
Factory overheads paid	$120,000$
Opening work-in-progress	$45,000$

Additional Information:
1. Factory power accrued and unpaid at year-end amounted to $\text{₦}15,000$ .
2. The cost of finished goods produced transferred to trading account was $\text{₦}410,000$ .

What is the valuation of closing work-in-progress as at 31 December 2025?

\text{₦}15,000

\text{₦}20,000

\text{₦}30,000

\text{₦}60,000

Show answer & explanation

Answer: $\text{₦}30,000$

Answer

The valuation of closing work-in-progress as at 31 December 2025 is

\text{₦}30,000

.

The correct answer of

\text{₦}30,000

is obtained by first adjusting direct wages for prepayment (

\text{₦}90,000 - \text{₦}10,000 = \text{₦}80,000

) to get Prime Cost of

\text{₦}260,000

. Adding adjusted factory overheads (

\text{₦}120,000 + \text{₦}15,000 = \text{₦}135,000

) gives total manufacturing costs of

\text{₦}395,000

. Adding opening WIP of

\text{₦}45,000

gives

\text{₦}440,000

. Subtracting the transferred cost of production (

\text{₦}410,000

) yields the closing WIP valuation of

\text{₦}30,000

.

Step-by-Step Solution

1

Calculate adjusted direct wages incurred for the period

\text{Direct Wages} = \text{₦}90,000 - \text{₦}10,000\text{ (prepayment)} = \text{₦}80,000

Prepaid expenses must be deducted because they relate to the subsequent accounting period.

2

Determine Prime Cost

\text{Prime Cost} = \text{Direct Materials} (\text{₦}180,000) + \text{Direct Wages} (\text{₦}80,000) = \text{₦}260,000

Prime Cost consists of all direct manufacturing costs incurred during the period.

3

Calculate adjusted total factory overheads

\text{Factory Overheads} = \text{₦}120,000 + \text{₦}15,000\text{ (accrual)} = \text{₦}135,000

Accrued expenses must be added as they represent costs incurred in the current period but unpaid.

4

Compute total manufacturing costs incurred during the period

\text{Total Manufacturing Costs} = \text{Prime Cost} (\text{₦}260,000) + \text{Factory Overheads} (\text{₦}135,000) = \text{₦}395,000

Total current production costs equal direct costs plus indirect factory costs.

5

Apply the Work-in-Progress formula to solve for Closing Work-in-Progress

\text{Closing WIP} = \text{Total Manufacturing Costs} (\text{₦}395,000) + \text{Opening WIP} (\text{₦}45,000) - \text{Cost of Production} (\text{₦}410,000) = \text{₦}30,000

Rearranging the formula

\text{Cost of Production} = \text{Total Manufacturing Costs} + \text{Opening WIP} - \text{Closing WIP}

isolates closing work-in-progress.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP)

Estimated Time:2m 30s

Question 4Question →

The following details were extracted from the financial records of Koko Manufacturing Enterprise for the year ended 31 December 2025:

- Opening stock of raw materials: $\text{₦}38,000$
- Purchases of raw materials: $\text{₦}215,000$
- Carriage inwards on raw materials: $\text{₦}12,000$
- Closing stock of raw materials: $\text{₦}45,000$
- Direct factory labor wages: $\text{₦}125,000$
- Factory indirect overhead expenses: $\text{₦}80,000$
- Opening Work-in-Progress (WIP): $\text{₦}34,000$
- Total Cost of Production transferred to Trading Account: $\text{₦}438,000$

What is the value of the closing Work-in-Progress (WIP) at the end of the financial year?

Show answer & explanation

Answer: 21000

Answer

The valuation of Closing Work-in-Progress (WIP) is ₦21,000.

To find the Closing Work-in-Progress (WIP), we first calculate the cost of raw materials consumed (

\text{Opening Raw Materials} + \text{Purchases} + \text{Carriage Inwards} - \text{Closing Raw Materials} = \text{₦}38,000 + \text{₦}215,000 + \text{₦}12,000 - \text{₦}45,000 = \text{₦}220,000

). Adding direct labor wages of

\text{₦}125,000

yields a Prime Cost of

\text{₦}345,000

. Including factory indirect overhead expenses of

\text{₦}80,000

gives total factory costs of

\text{₦}425,000

. Since

\text{Cost of Production} = \text{Total Factory Cost} + \text{Opening WIP} - \text{Closing WIP}

, substituting the values gives

\text{₦}438,000 = \text{₦}425,000 + \text{₦}34,000 - \text{Closing WIP}

, resulting in a closing WIP valuation of

\text{₦}21,000

.

Step-by-Step Solution

1

Calculate the Cost of Raw Materials Consumed

₦220,000

Raw materials consumed equals opening raw material inventory plus purchases and carriage inwards minus closing raw material inventory:

\text{₦}38,000 + \text{₦}215,000 + \text{₦}12,000 - \text{₦}45,000 = \text{₦}220,000

.

2

Determine the Prime Cost

₦345,000

Prime cost is the sum of raw materials consumed and direct factory labor wages:

\text{₦}220,000 + \text{₦}125,000 = \text{₦}345,000

.

3

Compute Total Factory Manufacturing Cost prior to Work-in-Progress adjustments

₦425,000

Adding factory indirect overhead expenses to the prime cost gives:

\text{₦}345,000 + \text{₦}80,000 = \text{₦}425,000

.

4

Reconcile Work-in-Progress (WIP) to determine Closing WIP

₦21,000

Using the accounting relationship

\text{Cost of Production} = \text{Total Factory Cost} + \text{Opening WIP} - \text{Closing WIP}

, we get

\text{₦}438,000 = \text{₦}425,000 + \text{₦}34,000 - \text{Closing WIP}

, which solves to

\text{Closing WIP} = \text{₦}459,000 - \text{₦}438,000 = \text{₦}21,000

.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP)

Estimated Time:2m 30s

Question 5Question →

During a financial period, Zenith Crafts Manufacturing incurred a total of $\text{₦}95,000$ in manufacturing costs before work-in-progress adjustments. If the opening work-in-progress was valued at $\text{₦}14,000$ and the closing work-in-progress was valued at $\text{₦}9,000$ , what is the total cost of production in Naira ( $\text{₦}$ )?

Show answer & explanation

Answer: 100000

Answer

The total cost of production is ₦100,000.

The cost of production is calculated by taking total manufacturing costs incurred, adding the opening work-in-progress (work started in the prior period and finished in the current period), and subtracting closing work-in-progress (work started but not yet finished by period end). Performing ₦95,000 + ₦14,000 - ₦9,000 yields ₦100,000.

Step-by-Step Solution

1

Add opening work-in-progress to the total manufacturing costs before adjustments.

₦95,000 + ₦14,000 = ₦109,000

Opening work-in-progress represents uncompleted goods from the previous period that are finished in the current period, so their valuation must be added.

2

Deduct closing work-in-progress from the sum.

₦109,000 - ₦9,000 = ₦100,000

Closing work-in-progress represents goods still undergoing production at year-end, which must be excluded from completed production costs.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP)

Question 6Question →

The financial records of Vanguard Industrial Enterprises for the year ended 31 December 2025 reveal the following details:

Item	Amount ( $\text{₦}$ )
Cost of raw materials consumed	180,000
Direct wages paid	62,000
Factory royalties	25,000
Factory overhead costs	50,000
Work-in-progress (1 January 2025)	48,000
Work-in-progress (31 December 2025)	53,000

*Note:* Direct wages of $\text{₦}8,000$ were accrued and unpaid at the end of the year.

What is the total cost of production to be transferred to the Trading Account for the year?

Show answer & explanation

Answer: 320000

Answer

The total cost of production transferred to the Trading Account for the year is 320,000.

The cost of production is determined by calculating the total manufacturing cost incurred during the period (Prime Cost of ₦275,000 plus Factory Overheads of ₦50,000 = ₦325,000), adding the opening work-in-progress (₦48,000), and subtracting the closing work-in-progress (₦53,000). Direct wages paid must first be adjusted for accrued wages (₦62,000 + ₦8,000 = ₦70,000). The final cost of production transferred to the Trading Account is ₦320,000.

Step-by-Step Solution

1

Adjust direct wages for accruals at the end of the period

Total Direct Wages = 62000 + 8000 = 70000

Accrued direct expenses must be added to direct wages paid to reflect total direct labor cost incurred during the period.

2

Calculate Prime Cost by summing direct costs

Prime Cost = 180000 + 70000 + 25000 = 275000

Prime Cost consists of raw materials consumed, direct wages, and direct factory expenses.

3

Add factory overheads to Prime Cost to get total manufacturing cost incurred

Total Manufacturing Cost = 275000 + 50000 = 325000

Factory overheads represent indirect costs incurred during production.

4

Apply Work-in-Progress (WIP) adjustments to find Cost of Production

Cost of Production = 325000 + 48000 - 53000 = 320000

Opening WIP is added because it was completed during this financial year, while Closing WIP is deducted because it remains uncompleted at year-end.

Key Concept

Valuation and Adjustment for Work-in-Progress in Manufacturing Accounts

Question 7Question →

The following figures were extracted from the accounting records of Danjuma Manufacturing Company for the year ended 31 December 2025:

Item	Amount ( $\text{₦}$ )
Cost of raw materials consumed	140,000
Direct wages	60,000
Direct expenses	10,000
Factory overheads	45,000
Work-in-progress at 1 January 2025	25,000
Work-in-progress at 31 December 2025	18,000

What is the total cost of production for the year?

\text{₦}248,000

\text{₦}255,000

\text{₦}262,000

\text{₦}298,000

Show answer & explanation

Answer: $\text{₦}262,000$

Answer

The total cost of production for the year is

\text{₦}262,000

.

The correct answer is

\text{₦}262,000

. Prime cost (

\text{₦}140,000 + \text{₦}60,000 + \text{₦}10,000 = \text{₦}210,000

) plus factory overheads (

\text{₦}45,000

) equals

\text{₦}255,000

. Adding opening work-in-progress (

\text{₦}25,000

) and deducting closing work-in-progress (

\text{₦}18,000

) yields

\text{₦}262,000

.

Step-by-Step Solution

1

Calculate Prime Cost

\text{Prime Cost} = \text{Raw Materials Consumed} + \text{Direct Wages} + \text{Direct Expenses} = \text{₦}140,000 + \text{₦}60,000 + \text{₦}10,000 = \text{₦}210,000

.

Prime cost consists of all direct costs incurred in manufacturing.

2

Calculate Total Factory Cost before WIP adjustment

\text{Total Factory Cost} = \text{Prime Cost} + \text{Factory Overheads} = \text{₦}210,000 + \text{₦}45,000 = \text{₦}255,000

.

Factory overheads represent indirect manufacturing expenses.

3

Adjust for Opening and Closing Work-in-Progress

\text{Cost of Production} = \text{Total Factory Cost} + \text{Opening WIP} - \text{Closing WIP} = \text{₦}255,000 + \text{₦}25,000 - \text{₦}18,000 = \text{₦}262,000

.

Opening WIP represents unfinished goods brought forward to be completed this period, while closing WIP represents goods unfinished at year-end that must be deducted.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP) in Manufacturing Accounts

Question 8Question →

A manufacturing enterprise provided the following figures for the financial year ended 31 December 2025:

Item	Amount
Direct manufacturing costs	$\text{₦}180,000$
Factory overhead expenses	$\text{₦}65,000$
Work-in-progress (1 January 2025)	$\text{₦}22,000$
Work-in-progress (31 December 2025)	$\text{₦}18,000$

What is the total cost of production transferred to the trading account?

\text{₦}241,000

\text{₦}245,000

\text{₦}249,000

\text{₦}263,000

Show answer & explanation

Answer: $\text{₦}249,000$

Answer

The total cost of production transferred to the trading account is

\text{₦}249,000

.

The cost of production is computed as: Total Manufacturing Costs (Direct Costs + Factory Overheads) + Opening Work-in-Progress - Closing Work-in-Progress. Substituting the given amounts:

\text{₦}180,000 + \text{₦}65,000 + \text{₦}22,000 - \text{₦}18,000 = \text{₦}249,000

.

Step-by-Step Solution

1

Calculate total manufacturing cost incurred before WIP adjustment.

\text{Direct Costs} + \text{Factory Overheads} = \text{₦}180,000 + \text{₦}65,000 = \text{₦}245,000

Prime costs and factory overheads combine to form total incurred cost during the production period.

2

Adjust for Opening Work-in-Progress (WIP).

\text{₦}245,000 + \text{₦}22,000 = \text{₦}267,000

Opening WIP represents goods partially completed in the previous period that were completed during the current period.

3

Deduct Closing Work-in-Progress (WIP).

\text{Cost of Production} = \text{₦}267,000 - \text{₦}18,000 = \text{₦}249,000

Closing WIP represents uncompleted goods at year-end, which must be carried forward to the next period.

Key Concept

Valuation and Adjustment for Work-in-Progress (WIP) in Manufacturing Accounts

Estimated Time:1m 30s

Question 9Question →

The financial records of Ogunlade Manufacturing Enterprise show the following details for the year ended 31 December 2025:

- Prime Cost: $\text{₦}145,000$
- Factory Overheads: $\text{₦}52,000$
- Work-in-Progress (1 January 2025): $\text{₦}18,500$
- Work-in-Progress (31 December 2025): $\text{₦}14,200$

What is the total cost of production to be transferred to the Trading Account?

\text{₦}201,300

\text{₦}192,700

\text{₦}197,000

\text{₦}229,700

Show answer & explanation

Answer: $\text{₦}201,300$

Answer

The total cost of production transferred to the Trading Account is

\text{₦}201,300

.

The total cost of production is determined by summing Prime Cost and Factory Overheads, adding Opening Work-in-Progress, and deducting Closing Work-in-Progress.

\text{₦}145,000 + \text{₦}52,000 + \text{₦}18,500 - \text{₦}14,200 = \text{₦}201,300

.

Step-by-Step Solution

1

Calculate total manufacturing costs incurred during the year

\text{Prime Cost} + \text{Factory Overheads} = \text{₦}145,000 + \text{₦}52,000 = \text{₦}197,000

Total cost incurred on production includes direct costs plus factory indirect expenses before adjusting for unfinished goods.

2

Adjust for Opening Work-in-Progress

\text{₦}197,000 + \text{₦}18,500 = \text{₦}215,500

Opening WIP represents partially completed goods from the previous period completed during the current period, so it is added.

3

Deduct Closing Work-in-Progress

\text{₦}215,500 - \text{₦}14,200 = \text{₦}201,300

Closing WIP represents goods remaining uncompleted at year-end, which must be deducted to find the cost of fully finished goods.

Key Concept

Cost of Production Calculation with WIP Adjustments

Estimated Time:1m 30s

Valuation and Adjustment for Work-in-Progress (WIP)

Answer

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