Required:

Discuss the benefits of a standard costing system for Crunchy Chips.

Discuss the president's concern about using the result of the engineering study to set the

labor standards. What standard would you recommend?

Form a group with two or three other students. Develop a standard cost sheet for Crunchy

Chips' plain potato chips. Round all computations to four decimal places.

Suppose that the level of production was $8\mathrm{.}8$ million bags of potato chips for the year as

planned. If $9\mathrm{.}5$ million pounds of potatoes were used, compute the materials usage variance

for potatoes.