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 250,000 $250,000 s Sales (3,000 pools) Variable expenses: Variable cost of goods sold 53,430 87.000 Variable selling expenses 28,000 28,000 79,430 93,000 Total variable expenses 157,000 Contribution margin 170,570 Fixed expenses: 87.000 67.000 Manufacturing overhead 92,000 92,000 Selling and administrative 159,000 Total fixed expenses 159,000 Net operating income (loss) 11,570 S (2,000) 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 plants 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 Price Standard Quantity or Hours or Rate Cost Direct materials 4.2 pounds $2.80 per pound $11.76 Direct labor 0.5 hours S8.30 per hour 4.15 Variable manufacturing 0.5 hours* S3.80 per hour 1.90 overhead Total standard cost $17.81 on machine-hours