Harrison Allocates Factory Overhead on the Basis of Direct Labor

question 27

Essay

Harrison allocates factory overhead on the basis of direct labor cost. The overhead rates for the year are 50% for Department A and 100% for Department B. Harrison started and completed job M15 during May. The costs of job M15 are summarized below. $\begin{array}{lrr} & \text { Department A } & \text { Department B } \\\text { Direct materials } & ? & \$ 150,000 \\\text { Direct labor } & \$ 500,000 & ? \\\text { Factory overhead } & ? & \$ 200,000\end{array}$ The total manufacturing costs assigned to job M15 during May were $1,400,000.
Required:
Calculate the missing (?) costs (Department A direct materials and factory overhead and Department B direct labor).

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Definitions:

Inputs

Resources (labor, materials, equipment) used in the production process to create goods or services.

Social Capital

The networks of relationships among individuals in a society, enabling that society to function effectively.

Worker's Skills

Refers to the abilities and expertise that employees possess, which are utilized in their jobs to perform tasks effectively.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value to an organization or society.