Problem: Gamma Manufacturing has prepared the following flexible budget for October and it is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Flexible -Variances- Budget Price/Rate Use/Efficiency Material A $20.000 $1,000 F $3,000 U Material B 30,000 500 U 1.500 F Direct labor 40.000 500 U 2.500 F The most likely explanation of the above variances for Material A is that: O the company used a new supplier. higher quality raw materials were used than were planned. Material A used during October was $2,000 less than expected. O a lower price than expected was paid for Material A.