Question 7 Asset Rich Ltd is a capital-intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labour hours, are derived from the master budget. Master Budget Actual Results Units produced 4,000 3,620 Direct Labour Hours 10,000 11,000 Fixed Overhead $200,000 $205,000 Variable Overhead $320,000 $355,000 Direct Labour $200,000 $180,000 The direct labour price variance was: a. $18,000 U b. $40,000 F c. $40,000 U d. $39,000 F