During a recent lstrike 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?

• Favorable Direct Labor Rate Variance and Favorable Direct Labor Efficiency Variance

• Unfavorable Direct Labor Rate Variance and Favorable Direct Labor Efficiency Variance

• Unfavorable Direct Labor Rate Variance and Unfavorable Direct Labor Efficiency Variance

• Favorable Direct Labor Rate Variance and Unfavorable Direct Labor Efficiency Variance