Final answer:
A company would most likely have an unfavorable labor rate variance due to hiring more experienced, and potentially higher-paid workers, but a favorable labor efficiency variance because these workers are more competent, leading to increased productivity.
Step-by-step explanation:
A company could experience an unfavorable labor rate variance and a favorable labor efficiency variance in a scenario where the workers they employ are more expensive than initially planned, yet these workers are able to perform tasks in less time or more effectively, leading to increased productivity. The option that explains this scenario is if the mix of workers used was more experienced than the usual mix (option c), meaning they would potentially demand higher wages but also work more efficiently.
This situation reflects the principle that a firm may incur higher costs due to union demands or the need for more skilled labor, but this can be offset by improved production methods or the use of more capital intensive machinery. As a consequence, even with higher labor costs, the overall productivity could increase, resulting in less time spent to produce a certain amount of goods (the labor efficiency).