Variable costing does not apply to service companies.

True or False

The following information describes a company's usage of direct labor in a recent period. The direct labor rate variance is:

Actual hours used	40,000
Actual rate per hour	$ 16
Standard rate per hour	$ 15
Standard hours for units produced	42,000

Multiple Choice

• $40,000 favorable.

• $30,000 unfavorable.

• $40,000 unfavorable.

• $30,000 favorable.

• $10,000 unfavorable.