During a recent lengthy strike at Morell Manufacturing Company, management replaced striking assembly line workers with office workers. The assembly line workers were being paid $18 per hour while the office workers are only paid $10 per hour. What is the most likely effect on the labor variances in the first month of this strike? (Points : 2)

Labor Rate Variance Labor Efficiency Variance

Unfavorable OR No effect

Labor Rate Variance Labor Efficiency Variance

No effect OR Unfavorable

Labor Rate Variance Labor Efficiency Variance

Unfavorable OR Favorable

Labor Rate Variance Labor Efficiency Variance

Favorable OR Unfavorable