Exercise 8-15 Direct materials and direct labor variances LO P2 The following information describes production activities of Mercer Manufacturing for the year Actual direct materials used Actual direct labor used Actual units produced 35,808 1bs. at $6.08 per 1b 11,858 hours for a total of $238,945 66,008 Budgeted standards for each unit produced are 0.50 pounds of direct material at $5.95 per pound and 10 minutes of direct labor at $21.90 per hour. AQ Actual Quantity Sa Standard Quantity AP Actual Price SP Standard Price AH Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable