A company's prime costs total $4,680,000 and its conversion costs total $5,700,000. If direct materials are $2,220,000, calculate the overhead costs:
a. 2,460,000
b.$1,020,000
c.$2,220,000
d.$3,480,000
e.$3,240,000
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Prime Costs = Direct Materials + Direct Labor Direct Labor = Prime Costs - Direct Materials Direct Labor = $4,680,000 - $2,220,000 Direct Labor = $2,460,000 Conversion Costs = Direct Labor + Overhead Costs Overhead Costs = Conversion Costs - Direct Labor Overhead Costs = $5,700,000 - $2,460,000 Overhead Costs = $3,240,000 The answer is e. $3,240,000