True Fit, as discussed in the chapter opener, uses a costing system with standard costs for 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 (no more than one-half page) to Romney Evans, Jessica Murphy, and Bill Adler, cofounders of True Fit, interpreting these two comments in the context of their business.