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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:
- Overabsorption$414
- Underabsorption$414
- Overabsorption$1,275
- Underabsorption$1,275
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