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: Budgeted Actual $210,000 $210,000 Sales (3,000 pools) Variable expenses Variable cost of goods sold 38,220 49,235 Variable selling expenses Total variable expenses Contribution margin Fixed expenses 15,000 5,000 64,235 156,780 45,765 53,220 Manufacturing overhead Selling and administrative 66,000 66,000 81,000 81,000 147,000 147,000 $ 9,780 $ (1,235) Total fixed expenses Net operating income (loss) 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 ma following standard cost per swimming pool jor problem lies in the variable cost of goods sold. She has been provided with the Standard Price or Rate $2.60 per pound $7.20 per hour $2.70 per hour Standard Quantity Standard or Hours 3.1 pounds 0.5 hours 0.4 hours* Cost Direct materials Direct labor Variable manufacturing overhead 8.06 3.60 1.08 Total standard cost 12.74 Based on machine-hours