The Organet Stamping Company manufactures a variety of products made of plastic and aluminum components. During the winter months substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer season. Other products are manufactured during the remainder of the year. Because a variety of products are manufactured throughout the year, factory volume is measured by production labor hours rather than units of product.

Production and sales volume have grown steadily for the past several years as can be seen from the following schedule of standard production labor content of annual output:

The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for 20X5 was \(\$ 2.50\), computed as follows:

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20X5 32,000 hours 20X4 30,000 hours 20X3 27,000 hours 20X2 28,000 hours 20X1 26,000 hours