Assume that your product uses a standard costing system and answer the following: How would the company go about setting standards for this product? What types of standards would be included? How would managers of the company use the standard costs? Assume the company reported the following variances in the most recent period. Can you think of a scenario that would explain each combination of variances? Unfavorable direct materials price variance, favorable direct materials usage variance, and unfavorable direct materials spending variance. Favorable direct labor rate variance, unfavorable direct labor efficiency variance, and unfavorable direct labor spending variance. Unfavorable direct labor efficiency variance and unfavorable variable overhead efficiency variance.