Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Actual Budget $ 265,000 $265,000 Sales (6,000 pools) Variable expenses: Variable cost of goods sold* Variable selling expens Total variable expenses Contribution margin Fixed expenses: 95,580112,700 14,000 14,000 109,580 126,700 155,420 138,300 Manufacturing overhead 63,000 63,000 78,00078,000 141,000 141,000 Selling and administrative Total fixed expenses Net operating income (loss) $ 14,420 (2,700) Contains direct materials, direct labor, and variable manufacturing overhead Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to "get things under control." Upon reviewing the plant's income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool Standard Quantity or Hours 3.9 pounds Standard Price Standard or Rate Cost Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 8.97 5.52 1.44 2.30 per pound 0.8 hours s 6.90 per hour 0.6 hours2.40 per hour 15.93 *Based on machine-hours