A corporation reported the following standard-to-actual cost information.

Actual Costs Total Variance

Direct materials $19,250 $900 Favorable

Direct labor $17,600 $800 Unfavorable

Which one of the following best explains both of the corporations variances?

A. Change in the collective bargaining agreement resulting in higher hourly wage rates.

B. Learning curve resulted in more efficient production.

C. Lower-quality, lower-cost materials resulted in higher than expected rework costs.

D. Unexpected increase in electricity costs.