In the AC499 Unit 4 costing decision analysis modeled here, a second rotomolding oven beats a contract molder by 76,400 a year, on costs traced to the rebuilt statements. Searches like "ac 499 unit 4 assignment example", "ac499 unit 4 sample" and "ac499 unit 4 example" land here.
What a finished AC499 Unit 4 costing decision analysis looks like
Roughly three pages of discussion around three exhibits. Exhibit A takes the 214-dollar standard hull cost from the Unit 3 package and sorts it: resin 78, direct labor 34 and variable overhead 19 are relevant, 131 in all, while the 83 of absorbed fixed overhead stays behind because the existing plant costs the same either way. Exhibit B sets the options side by side for 2,600 hulls: in-house at 131 each plus 64,000 of added fixed cost for maintenance and a second-shift lead, 404,600 a year; the contract molder at 176 plus 9 of freight, 481,000. Exhibit C brings in the oven itself, a 5.5-year simple payback and a pre-tax net present value of 70,309 at 9 percent over ten years. Break-even volume, 2,397 hulls, closes the exhibits.
How a AC499 Unit 4 example is structured
The recommendation opens the paper, conditional on volume, because a costing decision without a stated answer is only a schedule. The relevant-cost exhibit follows and does its sorting in view, naming every cost the case lists and saying whether it differs between options; depreciation on the existing oven and the plant manager's salary are named and set aside rather than silently dropped. The side-by-side comparison comes next, annual and per hull. Capital enters only in the third exhibit, since a per-hull comparison alone would ignore that one option needs 420,000 up front. Break-even volume then tests the answer against the forecast, which clears it by just 203 hulls. Qualitative factors close the paper: control over quality and scheduling favor the oven, while the molder carries the risk of a demand slump. Tax effects are named as belonging to the next unit and left there.
The cost card, sorted
Of 214 dollars a hull, 131 changes with the decision and 83 does not. The split comes straight from the standard cost the Unit 3 statements carry.
Two options at one volume
At 2,600 hulls, 404,600 in-house against 481,000 bought. The 64,000 of new fixed cost is itemized, so nobody has to take the in-house figure on trust.
Capital in its own exhibit
The 420,000 oven pays back in 5.5 years before tax, and discounting ten years of savings at 9 percent leaves a pre-tax NPV of 70,309.
A forecast barely clear of break-even
At 2,397 hulls the options tie. The forecast clears that by only 203, which the paper states plainly as the decision's main exposure.
Tax left to its own unit
Depreciation deductions and their timing change the after-tax answer. The paper names them and hands them to the tax brief instead of estimating them twice.
Where marks go in AC499 Unit 4
Sunk and unavoidable costs are where this analysis most often goes wrong: carrying the full 214-dollar standard cost into the in-house column, fixed overhead included, makes the contract molder look cheaper than it is. Costs that do not reconcile to the statement rebuild draw a second kind of deduction, specific to the capstone, since graders compare the cost card here with inventory figures submitted earlier. Leaving out the oven's price, or comparing per-hull costs without it, answers a smaller question than the one asked. A single point estimate with no break-even volume tends to lose judgment credit when the margin is this thin. Qualitative factors listed with no bearing on the choice read as padding. Tax effects estimated here and again in Unit 5 invite exactly the contradiction a capstone exists to expose.
Get a AC499 Unit 4 example written to your instructions
Share the cost data and supplier quotes in your case, your Unit 3 figures and the Unit 4 prompt with its rubric. Only the costs that differ between options enter the analysis, each reconciled to what you already submitted, with break-even volume shown. It comes free as a first sample, usually inside 24-48h.
AC499 Unit 4 questions, answered
Why is fixed overhead excluded from the in-house cost?
Because it does not change with the decision. The 83 of fixed overhead absorbed into each hull covers plant rent, the existing oven and supervision the company pays whether the peak volume is molded or bought. Including it would charge those costs against the in-house option only. The fixed costs the second oven does create, 64,000 a year, are included in full.
What discount rate does the sample use, and where does it come from?
Nine percent, taken from the case file's stated borrowing cost plus the margin the case supplies. Where a section gives no rate, the sample states its assumption and shows how the NPV moves one point either side, since a thin result like 70,309 is sensitive to it. Whatever rate appears here has to reappear unchanged in the integrated report.
Does the analysis consider quality risk from either option?
Yes, as a qualitative factor unless the case supplies a number. This sample lists the molder's reject rate as missing, requested back in the scoping plan, and describes what a reject rate would do to the per-hull cost if it arrived. An invented quality premium added to either option is exactly the kind of adjustment a grader asks to see supported.