1. What is the difference between an ideal standard and a practical standard in the context of standard costing? What would be some examples?
2. Cost variance is the difference between a standard cost and actual cost. When standard cost > actual cost, we call it favorable variance. When actual cost > standard cost, we call it unfavorable variance. Having said that, is an unfavorable cost variance always a bad thing? And, is a favorable cost variance always a good thing? How do you decide?