A company's prime costs total $3000000 and its conversation costs total $7000000. if direct materials are 1000000 and factory overhead is 5000000 then direct labor is .

A. $4,000,000
B. 14,000,000
C. $2,000,000.
D. $1,000,000
E. $3,000,000

The correct answer is C.

Explanation:

Giving the following information:

A company's prime costs total $3,000,000 and its conversation costs a total of $7,000,000. if direct materials are $1,000,000 and factory overhead is $5,000,000 .

We know that:

Prime costs= direct material + direct labor

Conversion costs= direct labor + factory overhead

Therefore:

3,000,000= 1,000,000 + DL

2,000,000= DL

To confirm:

7,000,000= DL + 5,000,000

DL= 2,000,000

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