Johnson Corporation uses standard costs with its job order cost accounting system. In January, an order for 1,900 units of Product B was received. The standard cost of one unit of Product B is as follows.

Normal capacity for the month was 4,200 machine hours. During January, the following transactions applicable to Job No. 12 occurred.
1. Purchased 6,250 pounds of raw materials on account at $1.06 per pound.
2. Requisitioned 6,250 pounds of raw materials for Job No. 12.
3. Incurred 2,100 hours of direct labor at a rate of $7.75 per hour.
4. Worked 2,100 hours of direct labor on Job No. 12.
5. Incurred manufacturing overhead on account $25,800.
6. Applied overhead to Job No. 12 on basis of standard machine hours allowed
7. Completed Job No. 12.
8. Billed customer for Job No. 12 at a selling price of $70,000.
9. Incurred selling and administrative expenses on account $2,000.

Instructions
(a) Journalize the transactions.
(b) Post to the job order cost accounts.
(c) Prepare the entry to recognize the total overhead variance.
(d) Prepare the January 2011 income statement formanagement.

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3.00 Direct materials Direct labor Overhead 3 pounds at $1.00 per pound 1 hour at $8.00 per hour 2 hours (variable $4.00 per machine hour; 8.00 12.50 $23.50 fixed $2.25 per machine hour) Standard cost per unit