A manufacturing company was faced by a shortage of a raw material caused by a strike at the material supplier's plant. In order to complete production, the company substituted another material. The substitute material has a higher cost than the original, but because of its higher quality, should result in fewer rejects.

Discuss what kind of variances can be expected as a result of using the substitute material. What decisions might be warranted if the substitute material causes the overall material variance to be favorable or unfavorable?