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YLtdoperatesanactivity-basedcostingsystemtoallocateoverheadtocostunits. Initsbudgetfortheyear,thecompanyexpectedtoundertakeatotalnumberofqualitycontrolinspections of550atatotalcostof$5,775. Duringthisperiod,atotalnumberofinspectionsof468wereundertaken,whichincurredanactualcost of$4,500. Theoverorunderrecoveryofthesecostsfortheaboveperiodwas: Overabsorption$414 Underabsorption$414 Overabsorption$1,275 Underabsorption$1,275

YLtdoperatesanactivity-basedcostingsystemtoallocateoverheadtocostunits.

Initsbudgetfortheyear,thecompanyexpectedtoundertakeatotalnumberofqualitycontrolinspections of550atatotalcostof$5,775.

Duringthisperiod,atotalnumberofinspectionsof468wereundertaken,whichincurredanactualcost of$4,500.

Theoverorunderrecoveryofthesecostsfortheaboveperiodwas:

  1. Overabsorption$414
  2. Underabsorption$414
  3. Overabsorption$1,275
  4. Underabsorption$1,275

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