Exercise 21-15 Direct materials and direct labor variances LO P3 The following describes production activities of Mercer Manufacturing for the year. Actual direct materials used Actual direct labor used Actual units produced 17,000 lbs. at $4.20 per lb. 5,550 hours for a total of $106,005 30,030 Budgeted standards for each unit produced are 0.50 pound of direct material at $4.00 per pound and 10 minutes of direct labor at $20.00 per hour. AH Actual Hours SH Standard Hours AR = Actual Rate SR Standard Rate AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price (1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit" answers to 2 decimal places.) (2) Compute the direct labor rate and efficiency variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (Do not round intermediate calculations.) Actual Cost AQ AP 17,000 x $ 4.20 $ 71,400 Direct materials price variance Direct materials quantity variance Total direct materials variance AQ 17,000 SP $4.00 $68,000 Standard Cost SQ SP 15,015 X $4.00 $ 60,060 $3,400 $ 7,940 $3,400 Unfavorable 7,940 Unfavorable $4,540 Unfavorable