Question

A company's prime costs total $4,800,000 and its conversion costs total $8,800,000. if direct materials are $1,900,000 and factory overhead is $5,900,000, then direct labor is:

Answer 1

Prime cost=direct material+direct labor
4800000=1900000+direct labor
Solve for direct labor
Direct labor=4800000-1900000
Direct labor=2900000. ..answer

If you try with the formula of the conversation cost to solve for direct labor, you will get the same answer

The formula of the conversation cost is
CC=direct labor+factory overhead

Hope it helps!