Gce Model Questions Vol1 2018 Financial Accounting Question 10

A manufacturing company produces a single product. The following data relate to the year ended 31 December 2020:\n\n- Opening stock of raw materials: \(\text{₦}20,000\)\n- Purchases of raw materials: \(\text{₦}120,000\)\n- Closing stock of raw materials: \(\text{₦}15,000\)\n- Direct labour cost: \(\text{₦}80,000\)\n- Production overheads are applied at \(150\%\) of direct labour.\n- Opening work‑in‑process (WIP): \(\text{₦}30,000\)\n- Closing WIP: \(\text{₦}25,000\)\n- Opening finished goods stock: \(\text{₦}40,000\)\n- Closing finished goods stock: \(\text{₦}35,000\)\n- An abnormal loss of raw materials amounting to \(\text{₦}5,000\) is charged to the profit and loss account.\n\nSales revenue for the year was \(\text{₦}500,000\) and selling and distribution expenses were \(\text{₦}60,000\). Calculate the net profit for the year.