Exercise 8-15 (Algo) Direct materials and direct labor variances LO P3 The following information relates to production activities of Mercer Manufacturing for the year. Actual direct materials used 17,700 pounds at $4.90 per pound Actual direct labor used 18,335 hours at $36 per hour Actual units produced 33,400 Standard quantity and price per unit for direct materials 0.50 pound at $4.85 per pound Standard quantity and rate per unit for direct labor 0.50 hour at $37 per hour 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. (2) Compute the direct labor rate and efficiency variances.