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 Sales (3,000 pools) $175,000 $175,000 Variable expenses: Variable cost of goods sold 24,300 58,310 Variable selling expenses 10,000 10,000 Total variable expenses 34,300 68,310 Contribution margin 140,700 106,690 Fixed expenses: Manufacturing overhead 50,000 50,000 Selling and administrative 65,000 65,000 Total fixed expenses 115,000 115,000 25,700 (8,310) 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 Quantity Standard Price Standard or Hours Cost or Rate Direct materials $2.00 per pound 6.00 3.0 pounds $6.00 per hour Direct labor 0.3 hours 1.80 Variable manufacturing overhead 0.2 hours $1.50 per hour 0.30 Total standard cost 8.10 *Based on machine-hours. During June the plant produced 3,000 pools and incurred the following costs: a. Purchased 23,000 pounds of materials at a cost of $3.20 per pound. b. Used 8,800 pounds of materials in production. (Finished goods and work in process inventories are nsignificant and can be ignored.) c. Worked 2,000 direct labor-hours at a cost of $5.70 per hour d. Incurred variable manufacturing overhead cost totaling $1,710 for the month. A total of 900 machine- hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis