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 290,000 $ 290,000 Sales (8,000 pools) Variable expenses: Variable cost of goods sold* 104,400 124,770 20,000 124,400 144,770 165,600 145,230 20,000 Variable selling expenses Total variable expenses Contribution margin Fixed expenses: 68,000 86,000 154,000 154,000 $ 11,600$ (8,770) 68,000 86,000 Manufacturing overhead Selling and administrative 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 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 Standard Price Standard Hours or Rate Cost Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 3.6 pounds 0.5 hours 0.4 hours* $2.20 per pound s 7.70 per hour $ 3.20 per hour $ 7.92 3.85 1.28 13.05 Based on machine-hours