Which of the following statements about direct material variances are likely to be true?

1. Differences between the actual production level and budgeted (expected) production level is NOT a reason why direct materials quantity (or efficiency) variances arise.
2. A direct materials quantity (or efficiency) variance can arise due to factors outside the production manager's control
3. A direct materials quantity (or efficiency) variance will arise if the organisation manages to negotiate a better price for its materials compared to what it had expected when constructing the static budget

   Statement 1 only

   Statement 2 only

   Statement 3 only

   Statement 1 and 2 only

   Statement 1, 2 and 3