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 Sales (4,000 pools) 210,000 210,000 Variable expenses: Variable cost of goods sold 50,680 63,710 Variable selling expenses 12,000 12,000 Total variable expenses 62,680 75,710 147,320 134.290 Contribution margin Fixed expenses: Manufacturing overhead 61,000 61,000 76,000 76,000 Selling and administrative 137,000 137,000 Total fixed expenses s 10,320 s (2,710) 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 plants 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 Cost or Hours or Rate 7.77 3.7 pounds $2.10 per pound Direct materials 4.02 $6.70 per hour Direct labor 0.6 hours Variable manufacturing overhead 0.4 hours $2.20 per hour 0.88 12.67 Total standard cost