BPP chapter 9 absorbtion and marginal costing

3.2 Example: Marginal and absorption costing compared
The following example will be used to lead you through the various steps in calculating marginal and
absorption costing profits, and will highlight the differences between the two techniques.
Big Woof Co manufactures a single product, the Bark, details of which are as follows.
Per unit $
Selling price 180.00
Direct materials 40.00
Direct labour 16.00
Variable overheads 10.00
Annual fixed production overheads are budgeted to be $1.6 million and Big Woof expects to produce
1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads
are $1.6 million for the year.
Budgeted fixed selling costs are $320,000 per quarter.
Actual sales and production units for the first quarter of 20X8 are given below.
January-March
Sales 240,000
Production 280,000
There is no opening inventory at the beginning of January.
Prepare statements of profit or loss for the quarter, using:
(a) Marginal costing
(b) Absorption costing

Step 4 Calculate under/over absorption of overheads
This is based on the difference between actual production and budgeted production.
Actual production = 280,000 units
Budgeted production = 320,000 units (see Step 1 above)
Under-production = 40,000 units
As Big Woof produced 40,000 fewer units than expected, there will be an under
absorption of overheads of 40,000 ? $1.25 (see Step 1 above) = $50,000. This will be
added to production costs in the statement of profit or loss.

Why it is not over absorption intead it has written inder absorption which previous chapters has written ???