Problem 3 (33 points) Thompson Company uses a standard cost system for its single product. The following data are available: Actual Costs and Volume: Direct materials purchased and used, 12,000 yards Direct labor cost incurred, 10,200 hours Units produced Standards per unit of product: Direct materials Direct labor $156,000 $142,800 12,600 1.1 yards at $15 per yard 0.80 hours at $13.25 per hour Required: 1. Compute the direct materials price and quantity variances. Indicate whether the variances is favorable or unfavorable. 2. Compute the direct labor price and quantity variances. Indicate whether the variances are favorable or unfavorable.