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: Flexible Budget Actual sales (5,000 pools) $200,000 $200,000 Variable expenses: Variable cost of goods sold* 54,100 67,330 Variable selling expenses 16,000 16,000 Total variable expenses 70,100 83,330 Contribution margin 129,900 116,670 Fixed expenses: Manufacturing overhead 52,000 52,000 Selling and administrative 67,000 67,000 Total fixed expenses 119,000 119,000 Net operating income (loss) $ 10,900 $ (2,330) I "Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn, who hasjust 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: ofatnatnjiayrdor Standard Price Standard or Rate Cost Hours Direct materials 3.2 pounds $ 2.20 per pound $ 7.04 Direct labor 0.5 hours $ 6.20 per hour 3.10 Variable manufacturing overhead 0.4 hours* $ 1.70 per hour 0.68 Total standard cost per unit $10.82 l *Based on machine-hours