Wright Inc. produces leather purses. Wright has developed a static budget for the first quarter based on 25,000 direct labor hours. During the quarter, the actual activity was 30,000 direct labor hours. Data for the first quarter are summarized as follows: Direct materials cost Direct labor cost Building rental Total Static budget (25.000 hours) $ 85,000 180,000 56.000 $321,000 Actual costs (30.000 hours) $ 90,000 164,000 60.000 $314,000 Comparing the static budget to the actual outcomes, we can say: Oa direct materials variance is favorable. b. a flexible budget should be used for assessing efficiency. Oc. direct labor variance is unfavorable.