Kramer Toy Company manufactures a plastic swimming pool at its East Crest Plant. The plant has been experiencing problems for some times as shown by its September income statement below:

Budgeted Actual Sales (15,000 pools) $495,000 $495,000 Less variable expenses: Variable cost of goods sold 220,050 227 120 Variable selling price 24,000 24,000 Total variable expenses 244.050 251,120 Contribution margin 250,950 243,880 Less fixed expenses: Manufacturing overhead 128,000 128,000 Selling and administrative 85,000 85,000 Total fixed expenses 213,000 213,000 Net operating income $37,950 $30,880Standard Quantity Standard Price Standard or Hours or Rate Cost Direct materials 3.2 pounds $1.80 per pound $5.76 Direct labor 0.8 hours $9.20 per hour $7.36 Variable manufacturing overhead 0.5 hours* $3.10 per hour $1.55 Total standard cost $14.67