Two departmental rates, one embossed griddle order and a prorated year-end difference make up this AC420 Unit 3 job order costing problem, at 22.53 dollars a griddle. Searches like "ac 420 unit 3 assignment example", "ac420 unit 3 sample" and "ac420 unit 3 example" land here.
What a finished AC420 Unit 3 job order costing problem looks like
A header block carries the job number, the customer described only as a composite outdoor outfitter, the quantity and the dates. The cost sheet beneath has three sections. Direct materials list 11,700 pounds of iron charge at 0.29, sand cores, packaging and the job's own embossed pattern at 2,850 dollars, 8,160 in all. Direct labor splits 64 foundry hours at 27.50 from 118 finishing hours at 24.00. Overhead is applied twice: 21 molding-line hours at 182 dollars and 118 finishing labor hours at 31.40, 7,527.20 together. A summary box gives 20,279.20 and 22.53 per griddle. A separate schedule takes the year's 46,800 dollars of underapplied overhead and spreads it over ending work in process, finished goods inventory and cost of goods sold.
How a AC420 Unit 3 example is structured
Rate derivation sits at the top, one line per department, because the job cannot be costed until both rates exist: 2,548,000 dollars of estimated foundry overhead over 14,000 molding-line hours, and 1,130,400 of finishing overhead over 36,000 labor hours. Each base is defended in a sentence, since the molding line is machine-paced while finishing depends on grinding and seasoning crews. The pattern is treated as direct material because it serves this job and no other, and a footnote says so. The cost sheet then tracks castings through the plant in the sequence they actually travel. The proration schedule closes the problem. It uses applied overhead in each ending balance as the base, shows 4,212, 7,488 and 35,100 dollars going to the three accounts, and states what a straight write-off would have done to gross margin instead.
Two rates, two bases
Foundry overhead per molding-line hour at 182 dollars and finishing overhead per labor hour at 31.40, each derived from the year's estimates before the job is costed.
A pattern that belongs to one job
The embossed match plate, 2,850 dollars, is charged directly to Job 4417 because no other order can use it, and a footnote records that reasoning.
Materials, labor and applied overhead
Iron, cores, packaging and pattern for 8,160 dollars; foundry and finishing labor for 4,592; applied overhead of 7,527.20 from the two departmental rates.
Cost per griddle
20,279.20 dollars over 900 units gives 22.53, the figure a quote for a repeat order would start from, less the pattern if the plate is reused.
Spreading the year-end difference
46,800 dollars of underapplied overhead allocated by the applied overhead in each balance: 4,212 to work in process, 7,488 to finished goods and 35,100 to cost of goods sold.
Where marks go in AC420 Unit 3
Where this problem most often goes wrong is the rate: one plant-wide rate used after the problem supplied two departmental ones, or a departmental rate built on actual rather than estimated overhead. Either choice abandons the normal costing the unit is testing. Charging the pattern to overhead, where it would be spread over every job in the plant, is another common deduction, since it undercosts this order and overcosts the rest. The proration step draws its own losses: prorating on total account balances instead of the overhead component, or closing the whole difference to cost of goods sold when the prompt asked for proration. Unit costs reported without the rounding stated, and a summary box that fails to agree with the three sections above it, account for most of the smaller deductions.
Get a AC420 Unit 3 example written to your instructions
Job data from your Unit 3 problem comes first: requisitions, labor hours by department, estimated overhead and allocation bases, plus whatever disposition rule applies to over- or underapplied overhead. Add the rubric. The cost sheet, rate derivations and year-end schedule are built on those figures within 24-48h, and a first custom sample carries no charge.
AC420 Unit 3 questions, answered
When should underapplied overhead be prorated instead of closed to cost of goods sold?
When the amount is material or the problem says so. Here the difference is about 1.3 percent of applied overhead, small enough that many companies would simply write it off against cost of goods sold, a point the sample makes. This problem required proration, so the schedule prorates and shows the 11,700 dollars that a write-off would have kept out of inventory.
Why not use one plant-wide overhead rate?
Because the two departments consume overhead for different reasons. The molding line's costs follow machine time, while finishing costs follow crew hours at the grinders and seasoning ovens. A single rate would charge a labor-heavy job for machine costs it barely used. AC420 problems that supply departmental data usually expect departmental rates, and the sample explains the choice in a sentence.
Do journal entries belong in the answer?
Only where the instructions ask. Some AC420 sections want each transfer journalized, from the first requisition to the sale; others grade the cost sheet and the proration alone. Where the prompt includes entries, the sample places them after the summary box and ties every amount to a figure already on the sheet.