PR 10-38 (Static) Direct-Labor Variances at Colgate-Palmolive Company; Cost Variance Investigation (LO 10-3, 10-4)

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The following data pertain to Colgate-Palmolives liquid filling line during the first 10 months of a particular year. The standard ratio of direct-labor hours to machine hours is 4:1. The standard direct-labor rate is $15.08.

Colgate-Palmolive: Direct-Labor Efficiency Variance Data*Footnote asterisk
	Units Produced	Machine Hours	Standard Direct-Labor Hours	Actual Direct-Labor Hours	Direct-Labor Efficiency Variance
January	50,478	165.5	662.00	374.00	$ 4,343
February	31,943	100.3	401.20	214.00	2,823
March	185,179	552.0	2,208.00	1,068.00	17,191
April	212,274	713.8	2,855.20	1,495.75	20,501
May	48,390	160.0	640.00	364.00	4,162
June	82,436	232.0	928.00	536.50	5,904
July	36,208	104.0	416.00	283.00	2,006
August	33,483	96.0	384.00	317.50	1,003
September	31,560	96.0	384.00	328.50	837
October	28,191	72.0	288.00	158.00	1,960

*Footnote asteriskSource of data: Alan S. Levitan and Sidney J. Baxendale, Analyzing the Labor Efficiency Variance to Signal Process Engineering Problems, Journal of Cost Management 6, number 2, page 70.

PR 10-38 (Static) Part 1: Calculate the following amounts.

Required:

1-a. Which of the following amounts were used to calculate January's standard direct-labor hours?

1-b. Which of the following amounts were used to calculate January's direct-labor efficiency variance?

2. Calculate the following amounts.

The standard direct-labor cost for each of the 10 months.

For each month, 20 percent of the standard direct-labor cost.

3. Suppose management investigates all variances in excess of 20 percent of standard cost. Which months contain a variance that would be investigated?

Calculate the standard direct-labor cost and 20 percent of the standard direct-labor cost for each of the 10 months. Suppose management investigates all variances in excess of 20 percent of standard cost. Which months contain a variance that would be investigated? Note: Select "Yes" if the listed month contains variance that would be investigated, and "No" if it is not. Round your final answers to the nearest whole dollar amount