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: the average wage rate paid to employees was less than expected management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency employees did not work as efficiently as expected to accomplish the job the company may have assigned more experienced employees this month than originally planned