The Manager of a Grocery Store Shows You and Your

question 216

Essay

The manager of a grocery store shows you and your friend a tabloid headline "Flu Shots Have Been Proven to Cause the Flu." The manager says, "Those folks are right because every time I have ever taken a flu shot , I've gotten the flu." Your friend says, "Well, that settles it. I'm not taking a flu shot." As a critical thinker, what would you tell your friend?

---

Definitions:

Management By Exception

A management strategy where only significant deviations from planned results are brought to the attention of management, focusing efforts on areas that are not performing as expected.

Standard Costs

Preset costs established for the manufacture of a product, including direct materials, direct labor, and overhead expenses, against which actual costs are compared.

Fixed Overhead Cost Variance

The difference between the budgeted fixed overhead costs and the actual fixed overhead incurred.

Variance Analysis

The process of examining differences between actual and budgeted/expected financial performance and investigating the causes.