Red Wing Company applies factory overhead based on direct labor costs. The company incurred the following costs during 2011: direct materials costs, $637,500; direct labor costs, $2,500,000; and factory overhead costs applied, $1,000,000.
1. Assuming that the company's $337,485 ending Finished Goods Inventory account for year 2011 had $137,485 of direct materials costs, determine the inventory's direct labor costs and its overhead costs.