1.Assume you are setting standard materials costs for a pizza restaurant.Use the example of a medium sized cheese pizza. How would you determine what standard materials cost should be?
2. Same question but take standard direct labor costs.
3. Did you think about any problems such as a worker dropping a pizza, someone ordering carryout but then not picking it up, etc.? Should those costs change the standard costs? Why or why not?
4. Suppose you have a favorable materials price variance and an unfavorable direct labor time variance. How could these two be related?