Assume your company sells bags of one dozen chocolate chip cookies. These cookies are made in your kitchen for now, as your company is just starting up.

Each student should individually estimate the direct materials and direct labor inputs needed to produce each bag of cookies. For each type of direct material (e.g., flour, sugar, etc.) and direct labor, determine the standard quantity and standard price. Since the cookies are made in your kitchen, you can ignore overhead costs.The result should be a total standard cost (excluding overhead) for the product or service.