Thomas Textiles Corporation began November with a budget for 41,000 hours of production in the Weaving Department. The department has a full capacity of 55,000 hours under normal The budgeted overhead at the planned volumes at the beginning of November was as follows: Variable overhead $114,800 Fixed overhead 82,500 Total $197,300

What does the concept of ‘management by exception’ mean and what factors are considered when assessing the significance of a variance?

Comment on the statement “A favourable variance is always better than an adverse variance” by considering one behavioural issue involved.