Okinawa Company uses job-order costing. They worked on three jobs in July. Data are as follows:

  Job 2106


Job 2107


Job 2108
Direct materials $10 450 $12 300 $16 150
Direct labour $16 000 $12 200 $24 000
Machine hours 500 300 1 000
Balance, 1 July $21 310 $6 250 $0


Overhead is applied to jobs at the rate of $16 per machine hour. By 31 July, Jobs 2106 and 2108 were completed. Jobs 2102 and 2106 were sold. Job 2107 remained n process. On 1 July, the balance in Finished Goods was $49 000 (consisting of Job 2102 for $25 600 and Job 2104 for $23 400).

Okinawa prices its jobs at cost plus 30%. During July, variable marketing expenses were 5% of sales and fixed marketing expenses were $2 000; administrative expenses were $4 800.


(a) Prepare job-order cost sheets for all jobs in process during July, showing all costs through 31 July.

(12 marks)

(b) Calculate the balance in Work in Process on 31 July.                                                        (1 mark)

(c) Calculate the balance in Finished Goods on 31 July.                                                          (2 marks)

(d) Calculate Cost of Goods Sold for July.                                                                  (2 marks)

(e) Calculate operating income for Okinawa Company for the month of July.                        (7 mark)

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