The following data pertain to Colgate Palmolive\'s liquid filling line during th

Question

The following data pertain to Colgate Palmolive's 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 $15.88. Colgate Palmolive: Direct-Labor Efficiency Variance Data* Standard Actual Direct-Direct- Direct-Labor Units Machine Labr aborEfficiency Produced Hours Hours Hours Variance January 50,638 173.5 694.00 390.00 $4,828 February 32,103 108.3 March April May June July August September 31,960 104.0 October 3,227 18,611 213,874725.0 2,900.00 1,519.75 21,918 4,637 6,725 433.20 230.00 185,979 568.0 2,272.00 1,100.00 49,190 168.0 82,996248.0 36,528 112.0 33,803104.0 672.00 380.00 992.00 568.50 448.00 299.00 2,366 416.00 341.50 416.00 351.50 320.00 190.00 2,064 1,183 1,024 28,591 80.0 Source of data: Alan S. Levitan and Sidney J. Baxendale, "Analyzing the Labor Efficiency Variance to Signal Process Engineering Problems," Journal of Cost Management 6, no. 2 (Summer 1992), p. 70. Required: 1-a. Which of the following amounts did Colgate Palmolive use in calculating its standard direct labor hours for the month of January? (Select all that apply.) Units produced Machine hours Actual direct-labor hours Standard ratio of direct-labor hours to machine hours

Explanation / Answer

Requirement 1 -a Machine Hours Standard ratio of direct-labor hours to machine hours Requirement 1 -b Standard direct labor hours Actual direct labor hours Standard direct labor rate Requirement 2 -a Standard direct laobor cost for each of the 10 Months Month Standard Direct labor hours Standard direct labor rate Standard Direct Labor Cost January 694.00 15.88                    11,021 February 433.20 15.88                      6,879 March 2272.00 15.88                    36,079 April 2900.00 15.88                    46,052 May 672.00 15.88                    10,671 June 992.00 15.88                    15,753 July 448.00 15.88                      7,114 August 416.00 15.88                      6,606 September 416.00 15.88                      6,606 October 320.00 15.88                      5,082 Requirement 2 -b Month Standard Direct Labor Cost 20% of the Standard Direct Labor Cost January                   11,021                       2,204 February                      6,879                       1,376 March                   36,079                       7,216 April                   46,052                       9,210 May                   10,671                       2,134 June                   15,753                       3,151 July                      7,114                       1,423 August                      6,606                       1,321 September                      6,606                       1,321 October                      5,082                       1,016 Requirement 3 Month Direct Labor Efficiency Variance 20% of the Standard Direct Labor Cost Difference Variance in excess of 20% January                      4,829                       2,204                    -2,625 Yes February                      3,227                       1,376                    -1,851 Yes March                   18,611                       7,216                  -11,395 Yes April                   21,918                       9,210                  -12,708 Yes May                      4,637                       2,134                    -2,503 Yes June                      6,725                       3,151                    -3,574 Yes July                      2,366                       1,423                        -943 Yes August                      1,183                       1,321                          138 September                      1,024                       1,321                          297 October                      2,064                       1,016                    -1,048 Yes Requirement 6 Production volume was significantly higher

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