Neco Model Questions Vol1 2025 Financial Accounting Question 15

A manufacturing company produces a single product. The following data relate to the year ended 31 December 2025 (all amounts in ₦): Opening inventories - Raw materials: ₦120,000; Work‑in‑progress (WIP): ₦80,000; Finished goods: ₦150,000. Purchases of raw materials: ₦500,000. Direct labour incurred: ₦300,000. Factory overhead is applied at 150 % of direct labour cost. Closing inventories - Raw materials: ₦100,000; WIP: ₦70,000; Finished goods: ₦180,000. During the year 5,000 units were started and 4,500 units were completed and transferred to finished goods. Selling price per unit: ₦1,200. Selling and distribution expenses: ₦150,000. Administrative expenses: ₦100,000. A loss on the sale of obsolete finished goods amounting to ₦20,000 was recorded. Calculate the gross profit for the year.