USB Industries makes small, portable solid state hard drives in a robotic factory. Indirect expenses include cleaning fluids for the electronic parts. These fluids are petroleum based and as such, the cost of the fluids closely match world oil prices. As much as possible, USBI collects the waste fluids, and resells the waste to a recycler which offsets some of the costs. As the factory manager, you are reviewing your monthly operations report. You had expected to produce 400,000 hard drives, but due to increased demand, produced 420,000. The original budget for cleaning fluid for the month was $80,000 net of waste recovery sales. Actually, the net spend on cleaning fluid was $79,800.

Required

a) (6 marks) Calculate whether the cost of cleaning fluids were over or under applied and suggest some other areas to investigate what happened in the month.