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 BudgetedActual $310,000 $310,000 Sales (7,000 pools) Variable expenses Variable cost of goods sold* 110,810 131,685 25,000 25,000 Variable selling expenses Total variable expenses Contribution margin Fixed expenses 135,810 156,685 174,190 153,315 66,000 66,000 Manufacturing overhead Selling and administrative 91,000 91,000 157.000 157.000 $ 17,190 $ (3,685) 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 Standard Quantity or Hours Standard Price Cost Direct materials Direct labor Variable manufacturing overhead 0.4 hours 4.1 pounds 0.4 hours $2.70 per pound $8.20 per hour $3.70 per hour $11.07 3.28 1.48 Total standard cost $15.83 Based on machine-hours During June the plant produced 7,000 pools and incurred the following costs a. Purchased 33,700 pounds of materials at a cost of $3.15 per pound b. Used 28,500 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 3,400 direct labor-hours at a cost of $7.90 per hour d. Incurred variable manufacturing overhead cost totaling $12,710 for the month. A total of 3,100 machine- hours was recorded It is the company's policy to close all variances to cost of goods sold on a monthly basis