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 (4,000 pools) 239,000 239,000 Variable expenses Variable cost of goods sold 57,680 70,390 Variable selling expenses 16,000 16,000 86,390 Total variable expenses 73,680 Contribution margin 165,320 152,610 Fixed expenses Manufacturing overhead 72,000 72,000 Selling and administrative 82,000 82,000 Total fixed expenses 154,000 154,000 Net operating income (loss) 11,320 (1,390) 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 $2.70 per pound 8.64 Direct materials 3.2 pounds $7.30 per hour Direct labor 0.6 hours 4.38 $2.80 per hour Variable manufacturing overhead 0.5 hours 1.40 14.42 Total standard cost