suppose you manage the local Scoopy's ice cream parlor . In addition to selling ice cream cones , you make large batches of a few flavors of milk shakes to sell through- out the day . Your parlor is chosen to test the company's " Made-for - You " system . This new system enables patrons to customize their milk shakes by choosing different flavors . Customers like the new system and your staff appears to be adapting , but you wonder whether this new made-to- order system is as efficient as the old system in which you just made a few large batches . Efficiency is a special concern because your performance is evaluated in part on the restaurant's efficient use of materials and labor . Your superiors consider efficiency variances greater than 5% to be unacceptable . You decide to look at your sales for a typical day . You find that the parlor used 390 pounds of ice cream and 72 hours of direct labor to produce and sell 2 , 000 shakes . The standard quantity allowed for a shake is O. 2 pound of ice cream and 0 . 03 hour of direct labor . The standard costs are $ 1.50 per pound for ice cream and $8 per hour for labor