Question: Entrepreneur Chris Martin of Martin Guitar (see Chapter opener) uses a costing system with standard costs for direct materials, direct labor, and overhead costs. Two

Entrepreneur Chris Martin of Martin Guitar (see 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 Chris Martin a short memo (no more than 1 page) interpreting these two comments.

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Managerial Accounting 2010 Edition by John J. Wild, Ken W. Shaw