IGCSE Accounting: Manufacturing accounts (Cambridge 0452) – Practice Questions

Syllabus edition note. This resource follows the Cambridge IGCSE Accounting 0452 syllabus (and Cambridge O Level Accounting 7707, which has the same subject content for the same series) for exams in 2027, 2028 and 2029 (version 1), first examined in the March 2027 series in India and the June 2027 series elsewhere. If you sit 0452 in November 2026, you sit the 2026 syllabus (version 2), which differs: Paper 1 has 35 multiple-choice marks in 1 hour 15 minutes, not 40 marks in 1 hour 30 minutes; Topic 7 is “Accounting principles and policies”, without 7.2 Ethical considerations or 7.3 Technology and sustainability; 4.4 is “Irrecoverable debts and provision for doubtful debts”; income statements are named instead of statements of profit or loss; three-column running balance accounts are not required; Clubs and societies is 5.4 and Manufacturing accounts 5.5; and 6.3 is “Inter-firm comparison”. For this topic, the 2026 syllabus covers only trading and service businesses in 5.1 and limits drawings adjustments to goods taken by the owner for own use; for limited companies it excludes cumulative and non-cumulative preference shares, rights issues, share premium and capital redemption reserve but requires the difference between redeemable and non-redeemable preference shares (the 2027-2029 syllabus lists none of these); and for incomplete records it does not ask why businesses keep them or what their advantages are. If you sit in November 2026, work from the 2026 syllabus on the Cambridge International website.

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 5.4 Manufacturing accounts of the Cambridge IGCSE Accounting 0452 syllabus for exams in 2027, 2028 and 2029 (version 1). Learn the method in the study guide and the revision notes. The topic-wide set is Preparation of financial statements practice. The course hub and checklist show what else to revise. All businesses and figures are invented. Amounts are in dollars.

Questions

1. Fernhallow Ironworks makes metal gates. Classify each item as direct material, direct labour, factory overhead or not a factory cost: (i) steel bars; (ii) wages of the welders; (iii) salary of the factory manager; (iv) depreciation of welding equipment; (v) advertising in a trade magazine. [5]

2. Explain what work in progress is and why opening and closing work in progress are adjusted when finding factory cost of production. [3]

3. Fernhallow Ironworks has these figures for the year: raw materials inventory 8,400 at the start and 9,700 at the end; purchases 52,600; returns outwards 1,300; carriage inwards 900; direct wages 41,000.

(a) Calculate the cost of raw materials consumed. [2] (b) Calculate the prime cost. [2]

4. Calculate total factory overheads from: factory rent paid 12,000 including 1,000 paid in advance for next year; power paid 5,300 with 600 owing at the year end; indirect wages 9,800; machinery that cost 75,000, with a residual value of 5,000, depreciated straight line over 7 years. [5]

5. Prime cost is 81,000, factory overheads are 16,400, opening work in progress is 3,100 and factory cost of production is 96,200. Calculate closing work in progress. [3]

6. A factory machine cost 90,000 on 1 January 2026 and is depreciated at 20% a year on the reducing balance method.

(a) Calculate the depreciation for 2026 and for 2027 and the net book value at 31 December 2027. [3] (b) State in which financial statement this depreciation is charged. [1]

7. Factory hand tools were valued at 3,800 at the start of the year. Tools costing 1,100 were bought and the closing valuation is 3,500. Using the revaluation method, calculate the depreciation and state where it appears. [3]

8. Thorncastle Hinges, a sole trader, has factory cost of production of 150,000. Revenue is 214,000 and returns inwards 4,000. Finished goods inventory was 12,600 at the start and 15,300 at the end. Office expenses are 28,400 and carriage outwards 3,500. Calculate cost of sales, gross profit and profit for the year. [6]

9. Closing work in progress was overstated by 1,500. State the effect on factory cost of production, gross profit, profit for the year and the statement of financial position. [4]

10. Ashby Rope Works has at the year end: raw materials 7,900; work in progress 4,300; finished goods 10,600; trade receivables 18,000, with an allowance for irrecoverable debts of 5%; prepayments 700; bank 3,400. Current liabilities are trade payables 12,400 and accruals 600. Calculate total inventory, net trade receivables, current assets and working capital. [5]

11. The owner of a manufacturing business took finished goods costing 1,800 for home use, and 650 of the office expenses paid by the business is the owner’s private bill. Profit before these adjustments was 31,500, cash drawings were 18,000 and opening capital was 62,000.

(a) Calculate the corrected profit for the year. [3] (b) Calculate total drawings. [2] (c) Calculate closing capital. [2]

12. Hallowmere Glassworks, a sole trader, provides these figures: raw materials 6,200 at the start and 7,000 at the end; purchases 48,300; carriage inwards 700; direct wages 39,500; indirect wages 11,200; factory power paid 6,800 with 400 owing; factory rent paid 14,000 including 1,000 for next year; factory machinery cost 125,000 depreciated 10% on cost; work in progress 3,000 and 2,600; finished goods 9,100 and 8,400; revenue 205,000; office wages 31,000; irrecoverable debts 900.

(a) Prepare the manufacturing account to factory cost of production. [9] (b) Calculate cost of sales and gross profit. [3] (c) Calculate profit for the year. [2]

Answers

1. (i) Direct material [1]; (ii) direct labour [1]; (iii) factory overhead [1]; (iv) factory overhead [1]; (v) not a factory cost [1] (statement of profit or loss). [5] Examiner insight: A one-word label for each item is enough, but check that you used the category list in the question and did not invent a fifth.

2. Work in progress is goods started but not finished at the year end [1]. Opening work in progress is added because its earlier costs are finished this year [1]. Closing work in progress is deducted because those costs are not yet finished goods [1]. [3] Examiner insight: Explanations tend to gain more when they say why each adjustment goes in its direction, not only that one is added and one deducted.

3. (a) 8,400 + 52,600 - 1,300 + 900 - 9,700 [1] = 50,900 [1] (b) 50,900 + 41,000 [1] = 91,900 [1] Examiner insight: Showing the working line lets a marker credit your method even if one figure slips.

4. Rent 12,000 - 1,000 = 11,000 [1]; power 5,300 + 600 = 5,900 [1]; depreciation (75,000 - 5,000) / 7 = 10,000 [1]; include indirect wages 9,800 [1]; total 36,700 [1] Examiner insight: Adjust each expense before totalling, and list the lines so each adjustment is visible.

5. 81,000 + 16,400 + 3,100 = 100,500 [1]; 100,500 - 96,200 [1]; 4,300 [1] Examiner insight: Rearranging the factory cost formula for the missing line is a standard skill. Write the formula first, then substitute.

6. (a) 2026: 20% x 90,000 = 18,000 [1]; 2027: 20% x 72,000 = 14,400 [1]; net book value 90,000 - 18,000 - 14,400 = 57,600 [1] (b) The manufacturing account, as a factory overhead [1]. [4] Examiner insight: Apply the percentage to the net book value in the second year, not to cost, and say which statement carries the charge.

7. 3,800 + 1,100 - 3,500 [1] = 1,400 [1]; it is a factory overhead in the manufacturing account [1]. [3] Examiner insight: The revaluation method needs opening value plus additions less closing value. Writing the three values in order makes the calculation easy to follow.

8. Net revenue 214,000 - 4,000 = 210,000 [1]; cost of sales 12,600 + 150,000 - 15,300 [1] = 147,300 [1]; gross profit 210,000 - 147,300 = 62,700 [1]; expenses 28,400 + 3,500 = 31,900 [1]; profit for the year 30,800 [1] Examiner insight: A manufacturer’s cost of sales starts with opening finished goods and factory cost of production, not purchases.

9. Factory cost of production is understated by 1,500 [1]. Gross profit is overstated by 1,500 [1]. Profit for the year is overstated by 1,500 [1]. Inventory in current assets and capital are overstated by 1,500 [1]. [4] Examiner insight: State both direction and amount for each effect, and name the statement it appears in.

10. Inventory 7,900 + 4,300 + 10,600 = 22,800 [1]; allowance 5% x 18,000 = 900 [1]; net receivables 17,100 [1]; current assets 22,800 + 17,100 + 700 + 3,400 = 44,000 [1]; working capital 44,000 - 13,000 = 31,000 [1] Examiner insight: Show receivables net of the allowance, and keep the three inventories visible as separate lines.

11. (a) Add goods taken 1,800 [1]; add private expense 650 [1]; profit 31,500 + 1,800 + 650 = 33,950 [1] (b) 18,000 + 1,800 + 650 [1] = 20,450 [1] (c) 62,000 + 33,950 - 20,450 [1] = 75,500 [1] Examiner insight: Goods taken and private expenses raise drawings by the same amounts as they raise profit, so they do not change closing capital. Use that link to check your answer.

12. (a)

Raw materials 6,200 + 48,300 + 700 - 7,000 = 48,200
Direct labour 39,500
Prime cost                                      87,700
Overheads: indirect wages 11,200
           power 6,800 + 400 = 7,200
           rent 14,000 - 1,000 = 13,000
           depreciation 10% x 125,000 = 12,500
                                      total     43,900
                                               131,600
Add opening WIP 3,000, less closing 2,600      132,000

Raw materials consumed [1] with correct figure [1]; prime cost [1]; power [1]; rent [1]; depreciation [1]; overheads total [1]; WIP adjusted correctly [1]; factory cost of production 132,000 [1] (b) Cost of sales 9,100 + 132,000 - 8,400 [1] = 132,700 [1]; gross profit 205,000 - 132,700 = 72,300 [1] (c) Expenses 31,000 + 900 = 31,900 [1]; profit 72,300 - 31,900 = 40,400 [1] Examiner insight: Long questions reward a clear layout. Label each subtotal, and keep the factory lines apart from the office lines.

Where marks are usually lost

• Using purchases instead of raw materials consumed in prime cost.
• Adding closing work in progress or deducting opening work in progress.
• Putting office wages in factory overheads.
• Skipping the accrual or prepayment on a factory expense.
• Applying reducing balance to cost every year.
• Mixing up prime cost and factory cost of production.
• Leaving out the owner’s goods or private expenses from drawings.
• Writing totals without labels.

Next steps

• Review the revision notes and the study guide.
• Open the Cambridge IGCSE Accounting hub and the checklist.
• Take one of the free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

Why is raw materials consumed used instead of purchases in prime cost? Some raw materials are in inventory at the start and end of the year, so direct material is the cost of raw materials consumed: opening inventory plus purchases plus carriage inwards, less returns outwards, less closing inventory. Using purchases is a common error.

Should accruals and prepayments on factory expenses be adjusted? Yes. Adjust each factory expense for amounts owing or prepaid before totalling factory overheads, exactly as for office expenses. Skipping the adjustment is a common way to lose marks in Cambridge IGCSE Accounting (0452).

How do you split an expense shared by the factory and the office? Apply the fraction the question gives and put each part in its own statement: the factory share in the manufacturing account and the office share in the statement of profit or loss.

Why should each total in a manufacturing account be labelled? Marks are given for prime cost, factory overheads and factory cost of production as separate lines, so label each total clearly. Mixing up prime cost and factory cost of production is a common error.

Official syllabus

Cambridge IGCSE Accounting 0452 syllabus for exams in 2027, 2028 and 2029 (version 1), Cambridge International, section 5.4 Manufacturing accounts.