The following information describes production activities of Mercer Manufacturing for the year.

The following information describes production activities of Mercer Manufacturing for the year.

Actual direct materials used	21,000 lbs. at $4.30 per lb.
Actual direct labor used	7,570 hours for a total of $147,615
Actual units produced	42,300

Budgeted standards for each unit produced are 0.50 pounds of direct material at $4.20 per pound and 10 minutes of direct labor at $20.50 per hour. AQ = Actual Quantity SQ = 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.

Budgeted standards for each unit produced are 0.50 pounds of direct material at $4.20 per pound and 10 minutes of direct labor at $20.50 per hour. AQ = Actual Quantity SQ = 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.