Over Recovery / Under Recovery Level

Activity Based Costing
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Over Recovery / Under Recovery Level

I want to know: Do you calculate an over/under recovery for each activity or do you calculate one singe over/under recovery for the company?

  Hennie Stander
Accountant, South Africa

Over Recovery / Under Recovery for Significant Activities

I would suggest that you look at the variance on each activity and identify the ones that are significant to your business as some might need further analysis.
By looking at a single variance for the company could give you a scewed figure as positives and negatives could cancel each other out and hide areas that might need attention.

Further you could look at the total figure per department if this is applicable to your company.

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