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: Budgeted Actual 5 450,000 5450,000 Sales (15,000 pools) Variable expenses Variable cost of goods sold 180,000 9,290 20,000 Variable selling expenses Total varisble expenses Contribution margin Fixed expenses 20,000 200,000 216,290 250,000 233,710 Manufacturing overhead Selling and administrative 130,000 130,000 84,000 84,000 214,000 214,000 5 36,000 19,710 Total fixed expenses Net operating income Contains direct materisls, 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 hss been provided with the following standard cost per swimming pool: Standard Price or Rate 52.00 per pound 56.00 per hour 53.00 per hour Standard Quantity or Hours Standard Cost 5 6.00 Direct materials Direct labor Variable manufacturing overhed 0.4 hours Total standard cost 3.0 pounds 0.8 hours 4.80 1.20 5 12.00 Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchssed 60,000 pounds of materials at a cost of $1.95 per pound b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 11,800 direct labor-hours at a cost of $7.00 per hour d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 machine- hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis