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: Sales (7,000 pools) Variable expenses: Variable cost of goods sold* Variable selling expenses Total variable expenses. Contribution margin Fixed expenses: Manufacturing overhead Selling and administrative Total fixed expenses Net operating income (loss) Flexible Budget $310,000 110,810 Actual $ 310,000 131,685 25,000 25,000 135,810 156,685 174,190 153,315 66,000 66,000 91,000 157,000 91,000 157,000 $ 17,190 $ (3,685) *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: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit *Based on machine-hours. Standard Quantity or Hours 4.1 pounds 0.4 hours 0.4 hours* Standard Price or Rate Standard Cost $ 11.07 $ 2.70 per pound $ 8.20 per hour $ 3.70 per hour 3.28 1.48 $ 15.83