Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 65

Training employees to use standard amounts of materials in production is common. Typically, large companies invest in this training but small organizations do not. One can observe these different practices in a trip to two different pizza businesses. Visit both a local pizza business and a national pizza chain business and then complete the following.
Required
1. Observe and record the number of raw material items used to make a typical cheese pizza. Also observe how the person making the pizza applies each item when preparing the pizza.
2. Record any differences in how items are applied between the two businesses.
3. Estimate which business is more profitable from your observations. Explain.