Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,300 units of Product B was received. The standard cost of one unit of Product B is as follows.

Direct materials		3 pounds at $1.30 per pound		$3.90
Direct labor		1.10 hour at $9.00 per hour		9.90
Overhead		2 hours (variable $4.10 per machine hour; fixed $2.90 per machine hour)		14.00
Standard cost per unit				$27.80

Normal capacity for the month was 4,050 machine hours. During January, the following transactions applicable to Job No. 12 occurred.

1.		Purchased 4,420 pounds of raw materials on account at $1.34 per pound.
2.		Requisitioned 4,420 pounds of raw materials for Job No. 12.
3.		Incurred 1,521 hours of direct labor at a rate of $8.95 per hour.
4.		Worked 1,521 hours of direct labor on Job No. 12.
5.		Incurred manufacturing overhead on account $19,820.
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 $97,500.

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 2014 income statement for management. Assume selling and administrative expenses were $2,000.