Bob's Powerwasher Company Makes Custom Powerwashers for Individual Customers -Refer to the Figure

Bob's Powerwasher Company makes custom powerwashers for individual customers. On April 1, one job was in process, Job 900, which had a cost of $45,650. Jobs 901, 902, and 903 were started during the month of July. Data on costs added during the month are as follows:
Overhead is applied to production at the rate of 85% of direct labour cost. Job 903 was completed on April 26, and the client was billed at cost plus 45%. All other jobs remained in process.
$\begin{array}{lllll}&\text { Job } 900&\text { Job } 901&\text { Job } 902&\text { Job } 903\\\text { Direct Materials } & \$ 12,500 & \$ 6,740 & \$ 2,520 & \$ 7,870 \\\text { Direct Labour } & \$ 5,880 & \$ 10,280 & \$ 3,760 & \$ 11,360\end{array}$
-Refer to the Figure.Suppose selling and administrative expenses for the month of July equal $6,000.What is operating income for the month of July?

A) $6,998.70
B) $12,998.70
C) $28,886.00
D) $41,884.70

Correct Answer:

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