Question

Folsom Custom Skis, as discussed in the chapter opener, uses a costing system with standard costs for direct materials, direct labor, and overhead costs. Two comments frequently are mentioned in relation to standard costing and variance analysis: “Variances are not explanations” and “Management’s goal is not to minimize variances.”

Required
Write a short memo to Mike McCabe, Folsom Custom Skis’ President, (no more than 1 page) interpreting these two comments in the context of his business.



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  • CreatedNovember 29, 2013
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