Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.

Flexible Variances

Budget Price Efficiency

Material A $40,000 $1,600F $3,200U

Material B 68,000 500U 1,900F

Direct manufacturing labor 85,000 200U 2,700F

The most likely explanation of the above direct manufacturing labor variances is that ________.

a.

management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency

b.

the company may have assigned more experienced employees this month than originally planned

c.

employees did not work as efficiently as expected to accomplish the job

d.

the average wage rate paid to employees was less than expected