Road Ready Tire Co. manufactures automobile tires. Standard cost and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 5,200 tires were as follows: Standard Cost Actual costs Direct materials 71,000 lbs. @ 5.10 70,600 lbs. @ 5.00 Direct labor 1,300 hrs. @ 17.50 1,330 hrs. @ 17.80 Factory overhead Rates per direct labor hr, based on 100% of normal capacity of 1,350 direct labor hrs.

Variable cost 3.10 4,000 Variable cost Fixed cost 4.90 6,615 Fixed cost Each tire requires 0.25 hour of direct labor.