Precision Manufacturing Co., Ltd. uses a normal job-order costing to apply overhead to jobs. While Precision's production process requires both machines and labor, it is largely labor-intensive. Accordingly, overhead is applied on the basis of direct labor hours. The estimated overhead for the year was $1,256,000, and the estimated level of activity was 15,700 hours in terms of machine operation and 78,500 hours in terms of direct labor time. During the year, Precision used 16,000 machine hours and 78,000 direct labor hours. The actual overhead costs incurred was $1,260,000. Which of the following would be the overhead variance reported for the year? $4,000 under-applied O $12,000 under-applied O $20,000 under-applied o $20,000 over-applied Discretionary costs: O are variable in relation to the level of activity, such as the production or sales volume. O are often related to the core part of business, such as a long-term production capacity. O are hardly changed in the short-term. o include research and development costs