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 (6,000 pools) S 225,000 $225,000 Vanable expenses: Variable cost of goods sold73,620 Variable selling expenses 17,00017,000 90,620 105,700 134,380119,300 Total variable expenses Fixed expenses Manufacturing overhead Selling and administrative 53,00053,000 68,00068,000 121,000 121,000 s 13,380 $ (1.700) Total fixed expenses Net operating income (loss) 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 reiewing 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 Standard Price Standard or Rate Cost Direct materials Direct labor Variable manufacturing overhead 0.5 hours" Total standard cost or Hours 3.3 pounds 0.6 hours $2.30 per pound S 7.59 3.78 0.90 $6.30 per hour $1 80 per hour S 12 27 Based on machine-hours During June the plant produced 6,000 pocls and incurred the following costs a Purchased 24,800 pounds of materials at a cost of $2.75 per pound b Used 19,600 pounds of materials in production. (Finished goods and work in process inventories are insignficant and can be ignored ) c Worked 4.200 direct labor hours at a cost of $6.00 per hour d Incurred variable manufacturing overhead cost totaling $7,260 for the month. A total of 3,300 machine- hours was recorded t is the company's policy to close all variances to cost of goods sold on a monthly basis Type here to search DeEL