The manager of a manufacturing firm received the following information related to the last period's direct materials and direct labor variances: Direct materials price variance . . . . . . . . . . . . . . . . . Favorable Direct materials quantity variance . . . . . . . . . . . . . . Favorable Direct labor rate variance . . . . . . . . . . . . . . . . . . Unfavorable Direct labor efficiency variance . . . . . . . . . . . . . . . Favorable a. Ignoring all other variances, what are possible reasons for a favorable direct materials price variance? b. Given that the quality of direct materials purchased was exactly as expected, how would you explain the above combination of the four variances?
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