The manager of a manufacturing firm received the following information related to the last period’s direct materials and direct labor variances:

Direct materials price variance . . . . . . . . . . . . . . . . . Favorable

Direct materials quantity variance . . . . . . . . . . . . . . Favorable

Direct labor rate variance . . . . . . . . . . . . . . . . . . Unfavorable

Direct labor efficiency variance . . . . . . . . . . . . . . . Favorable

a. Ignoring all other variances, what are possible reasons for a favorable direct materials price variance?

b. Given that the quality of direct materials purchased was exactly as expected, how would you explain the above combination of the four variances?