During September of the current year, ABC Company purchased $3,500,000 raw materials. During the month, ABC incurred $2,040,000 direct labor cost and applied 80% of direct labor cost. During the same...

During September of the current year, ABC Company purchased $3,500,000 raw materials. During the month, ABC incurred $2,040,000 direct labor cost and applied 80% of direct labor cost. During the same month, there were changes in inventories as follows: Increase in raw materials $100,000; Decrease in work in process $150,000 and decrease in finished goods $75,000. How much is the conversion cost?

$3,672,000

$7,072,000

$5,640,000

$5,440,000