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 (4,000 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 Actual $250,000 $250,000 66,760 22,000 81,190 22,000 88,760 103,190 161,240 146,810 63,000 63,000 88,000 88,000 151,000 151,000 10,240 $ (4,190) "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 or Hours Direct materials Direct labor 3.8 pounds Standard Price on Rate $2.40 per pound Standard Cost $ 9.12 0.7 hours $ 7.90 per hour 5.53 Variable manufacturing overhead 0.6 hours $ 3.40 per hour Total standard cost per unit 2,04 $16.69