The same 3,678,400 dollars of overhead, allocated once by labor hours and once through a cost hierarchy, reorders three cookware lines in this AC420 Unit 5 activity-based costing comparison. Searches like "ac 420 unit 5 assignment example", "ac420 unit 5 sample" and "ac420 unit 5 example" land here.
What a finished AC420 Unit 5 activity-based costing comparison looks like
Two allocation tables and a ranking panel. The first table spreads 3,678,400 dollars across 42,100 direct labor hours at 87.37 an hour, giving 5.24 of overhead per skillet, 26.21 per enameled Dutch oven and 21.84 per custom logo piece. The second sorts the same pool by level: melting at 797.84 dollars a ton as the unit-level activity, pattern changeovers at 1,800 and enamel color batches at 2,600 as batch-level, pattern upkeep at 7,363.64 per active pattern as product-sustaining, and 1,160,400 of plant management, property tax and insurance held at facility level. The ranking panel sets margins per unit side by side: 6.60, 12.59 and 8.46 under the labor-hour rate against 9.28, 18.43 and a loss of 0.16 under the hierarchy.
How a AC420 Unit 5 example is structured
The traditional allocation is reproduced first and without criticism, because a reader has to recognize the starting point before accepting that it misleads. The hierarchy follows level by level, and each driver is justified in a clause: tons for melting because furnace power and refractory wear follow metal poured, changeovers for pattern swaps because each one idles the molding line, active patterns for upkeep because a pattern costs money to store and repair whether it runs or not. Facility costs stay at the plant line, and a sentence explains why assigning them would reintroduce the arbitrariness the method removes. A reconciliation line shows product-level margin of 4,595,800 dollars less the facility pool equaling the traditional total of 3,435,400, proof that cost moved rather than grew. A last paragraph interprets the reversal: forty-six patterns spread over 22,000 pieces are what sink custom work.
One rate, three products
3,678,400 dollars over 42,100 labor hours at 87.37 an hour. Dutch ovens absorb the most per unit because each takes five times a skillet's labor.
Four levels of activity
Melting per ton, changeovers and color batches per batch, pattern upkeep per active pattern. Each driver is chosen for causing its cost, not for being easy to count.
Held at plant level
Management salaries, property tax and insurance, 1,160,400 dollars, sit below product margins, since no product causes them and any split would be arbitrary.
The totals agree
Hierarchy margins of 4,595,800 less facility costs match the labor-hour total of 3,435,400 exactly, so overhead moves between lines rather than being invented.
Custom work reranked
Forty-six patterns and 150 changeovers carried by 22,000 pieces push overhead to 30.46 a piece, and the 8.46 margin becomes a loss of 0.16.
What the ranking does not decide
A loss per piece is not yet a case for dropping custom orders. Pattern upkeep continues for some time, so the page points toward pricing and minimum-order rules.
Where marks go in AC420 Unit 5
Allocating the facility-level pool by some convenient driver is the mistake that most undermines this comparison, because it spreads costs no product causes and blurs the reversal the hierarchy exists to show. Drivers picked for availability, such as labor hours reused for pattern upkeep, cost credit of their own. A second allocation that does not reconcile to 3,678,400 dollars signals lost or invented cost, and graders add the pools before reading anything else. Many submissions compute both sets of unit costs and stop there; the prompt asks what happened to the ranking, so the analysis has to name the line that moved and the activity that moved it. Recommending that custom work be dropped on the strength of one negative margin is marked down too, since part of that cost would remain.
Get a AC420 Unit 5 example written to your instructions
Include the Unit 5 overhead pools, the activity data by product and the existing allocation base, plus the rubric. Both allocations are built from those figures and reconciled to the same total, and the change in your product ranking is explained activity by activity. A first custom sample carries no fee and is returned in 24-48h.
AC420 Unit 5 questions, answered
Should facility-sustaining costs be allocated to products at all?
For internal product decisions, usually not. Plant management, property tax and insurance would not change if one product line grew or shrank, so any allocation is arbitrary. For inventory valuation under outside reporting rules, full absorption is still required, which is why the sample keeps the hierarchy result as an internal analysis and says so in a sentence.
How is a cost pool assigned to a level in the hierarchy?
By asking what makes the cost rise. If it grows with every unit poured, it is unit-level; with every run or setup, batch-level; with the number of distinct products supported, product-sustaining; and if nothing short of closing the plant changes it, facility-level. The sample states that test once and applies it to each pool in the problem.
Is a negative activity-based margin a reason to drop the product?
Not by itself. Some resources behind that margin, such as pattern storage and repair staff, would remain for a while after the line ended, and custom orders may bring in customers who buy standard pans too. The sample treats the reversal as a pricing question first, testing a minimum order size and a pattern charge, before any elimination is discussed.