Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead costs to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,320,000 in manufacturing overhead cost at an activity level of 576,000 machine-hours.

The company spent the entire month of January working on a large order for 12,300 custom made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow:

a. Raw materials purchased on account, $311,000. b. Raw materials requisitioned for production, $263,000 (80% direct and 20% indirect). c. Labor cost incurred in the factory, $159,000, (one-third direct labor and two-thirds indirect labor) d. Depreciation recorded on factory equipment, $63,200. e. Other manufacturing overhead costs incurred, $84,600 (credit Accounts Payable). f. Manufacturing overhead cost was applied to production on the basis of 40,780 machine-hours actually worked during the month.

g. The completed job for 12,300 custom made machine parts was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consist of direct materials, direct labor, and applied overhead)

Required:

1. Prepare Journal entries to record items (a) through (f) above [ignore item (g) for the moment].

2.Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant items for your journal entries to these T-accounts.

3. Prepare a journal entry for the item (g) above.

4. If 10,200 of the custom made machine parts are shipped to the customer by February, how much of the job's cost will be included in the cost of good sold for February?