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 $225,000 Sales (3,000 pools) Variable expenses: Variable cost of goods sold* Variable selling expenses Total variable expenses Contribution margin Fixed expenses: Manufacturing overhead Selling and administrative Total fixed expenses Net operating income (loss) *Contains direct materials, direct labor, and variable manufacturing overhead. Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit *Based on machine-hours. 44,520 21,000 65,520 159,480 62,000 87,000 149,000 $10,480 Actual $225,000 Standard Quantity or Hours 3.7 pounds 0.6 hours 0.5 hours** 56,975 21,000 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: 77,975 147,025 62,000 87,000 149,000 $ (1,975) Standard Price or Rate $ 2.30 per pound $7.80 per hour $ 3.30 per hour Standard Cost $8.51 4.68 1.65 $14.84 During June the plant produced 3,000 pools and incurred the following costs: a. Purchased 16,100 pounds of materials at a cost of $2.75 per pound. b. Used 10,900 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 2,400 direct labor-hours at a cost of $7.50 per hour. d. Incurred variable manufacturing overhead cost totaling $6,660 for the month. A total of 1,800 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required:

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: 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 During June the plant produced 3,000 pools and incurred the following costs: a. Purchased 16,100 pounds of materials at a cost of $275 per pound b. Used 10,900 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored) c. Worked 2,400 direct labor-hours at a cost of $7.50 per hour: d. Incurred variable manufacturing overhead cost totaling $6,660 for the month. A total of 1,800 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 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: 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 During June the plant produced 3,000 pools and incurred the following costs: a. Purchased 16,100 pounds of materials at a cost of $275 per pound b. Used 10,900 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored) c. Worked 2,400 direct labor-hours at a cost of $7.50 per hour: d. Incurred variable manufacturing overhead cost totaling $6,660 for the month. A total of 1,800 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required