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 (7,000 pools) 255,000 $255,000 Variable expenses Variable cost of goods sold* 85.400 104.590 Variable selling expenses 15,000 15.000 Total variable expenses 100,400 119.590 Contribution margin 154.600 135.410 Fixed expenses Manufacturing overhead 64,000 64.000 Selling and administrative 79,000 79,000 Total fixed expenses 143.000 143.000 Net operating income (loss) 11,600 (7,590) *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 es in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool. Standard Quantity Standard Price or Hours or Rate Direct materials 4.0 pounds $2.40 per pound 9.60 0.3 hours Direct labor $7.00 per hour 2.10 Variable manufacturing overhead 0.2 hours $2.50 per hour 0.50 Total standard cost 12.20 *Based on machine-hours