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The following data relates to the Polishing Department of Glory Production Limited for last year.

Budgeted production overhead cost Budgeted labor hours

Actual production overhead cost Actual labor hours

$$360,00080,000$ hours $$380,00082,000$ hours

Calculate the amount of the over$-$ or under$-$absorbed $($over or under$-$applied$)$ production overhead cost for the Polishing Department for last year.

a$.$ Over$-$absorbed $($over$-$applied$)$ production overhead cost of $$20,000.$

b$.$ Under$-$absorbed $($under$-$applied$)$ production overhead cost of $$20,000.$

c$.$ Under$-$absorbed $($under$-$applied$)$ production overhead cost of $$11,000.$

d$.$ Under$-$absorbed $($under$-$applied$)$ production overhead cost of $$9,000.$

$99.$ What is the name given to a budget that has been prepared by re$-$evaluating activities and comparing the incremental costs of those activities with their incremental benefits?

a$.$ Incremental budget

b$.$ Rolling budget

c$.$ Zero base budget

d$.$ Flexible budget

$100.$ Which ONE of the following would NOT explain a favorable direct materials usage variance?

a$.$ Using a higher quality of materials than that specified in the standard.

b$.$ A reduction in materials wastage rates.

c$.$ An increase in suppliers$$ quality control checks.

d$.$ Achieving a lower output volume than budgeted.

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