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 $179,000 $179,000 Sales (3,000 pools) Variable expenses; Variable cost of goods sold* 33,390 11,000 44,540 Variable selling expenses Total variable expenses Contribution margin Fixed expenses: 11,000 55,540 134,610 123,460 44,390 50,000 75,000 50,000 Manufacturing overhead Selling and administrative 75,000 125,000 125,000 $ 9,610 $ (1,540) 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 major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool Standard Standard Price or Rate $2.00 per pound $6.60 per hour $2.10 per hour Standard Quantity or Hours 3.6 pounds 0.5 hours 0.3 hours* Cost Direct materials Direct labor Variable manufacturing overhead $ 7.20 3.30 0.63 Total standard cost $11.13 *Based on machine-hours