A company's prime costs total $3,700,000 and its conversion costs total $7,700,000. If direct materials are $1,350,000 and factory overhead is $5,350,000, then direct labor is:

 A company's prime costs total $3,700,000 and its conversion costs total $7,700,000. If direct materials are $1,350,000 and factory overhead is $5,350,000, then direct labor is:

Multiple Choice

$4,000,000.


$15,400,000.


$2,350,000. Correct

$1,000,000.


$3,700,000.

Explanation
Prime Costs = Direct Materials + Direct Labor; 

$3,700,000 = $1,350,000 + Direct Labor; 

Direct Labor = $2,350,000 

OR

 Conversion Costs = Direct Labor + Factory Overhead; 

$7,700,000 = Direct Labor + $5,350,000;

 Direct Labor = $2,350,000.