| Course | GB519 Measurement and Decision Making |
|---|---|
| Unit | Unit 4 |
| Paper type | Job costing problem |
| Length | About 920 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | MBA |
| Updated | October 2026 |
Free sample paper for GB519 Unit 4
Forty Pediatric Braces, Two Overhead Rates: A Unit 4 Job Costing Problem and Bid Memo
[Student Name]
Purdue University Global
GB519: Measurement and Decision Making
Unit 4 Job Costing Problem
[Instructor Name]
[Date]
The lab, the hospital system and every figure are composite and illustrative; the sources cited are real.
The Request
A regional hospital system is opening a pediatric mobility clinic and has asked Fernhill Orthotic Lab to bid on its first order: forty custom ankle-foot orthoses (AFOs) for children with cerebral palsy and other conditions affecting gait. The clinic's purchasing office has a budget of about $12,000 for the order, or $300 a brace. Fernhill's list price for an adult AFO is $420.
Pediatric AFOs are small but demanding. Each mold has tight contours around the ankle bones and needs about 1.8 hours on the five-axis mill, against an average of 1.4 hours for adult AFOs and 0.15 hours for a pair of foot orthoses. Finishing takes about the same technician time as an adult brace.
Materials and Labor, Shown Once
Neither depends on how overhead is applied, so both sheets use the same figures:
Direct materials: polypropylene sheet, padding, straps and hardware at $62 a brace, or $2,480 for the job.
Direct labor: 2.6 technician hours a brace, 104 hours in all, at $34 an hour, or $3,536.
Prime cost for the job is $6,016.
Sheet 1: One Rate for the Whole Lab
Fernhill estimates $1,500,000 of overhead for the year and 30,000 technician hours, giving a plantwide rate of $50 per technician hour.
Overhead applied: 104 hours times $50, or $5,200.
Total job cost: $6,016 plus $5,200, or $11,216.
Cost per brace: $280.40.
On this sheet the hospital's $300 budget looks like a modest profit.
Sheet 2: Digital Department and Fabrication Floor, Costed Apart
Fernhill's overhead falls into two broad pools with different causes. The digital department, covering modeling software, the mills, their maintenance and the engineers who program them, accounts for $780,000. Its cost follows mill hours, of which the lab expects 12,000 for the year. The fabrication floor, covering ovens, finishing benches, supplies, fitting rework and order documentation, accounts for $720,000 and follows technician hours.
Digital department rate: $780,000 divided by 12,000 mill hours, or $65 per mill hour.
Fabrication floor rate: $720,000 divided by 30,000 technician hours, or $24 per technician hour.
Digital overhead applied: 72 mill hours times $65, or $4,680.
Fabrication overhead applied: 104 technician hours times $24, or $2,496.
Total overhead: $7,176.
Total job cost: $6,016 plus $7,176, or $13,192.
Cost per brace: $329.80.
The plantwide rate charges the job for technician hours it uses and nothing for the 72 mill hours it consumes, so it understates the braces' cost by $49.40 each.
Why the Sheets Disagree
A plantwide rate assumes every job uses overhead in proportion to technician time. That holds for jobs with an average mix of mill and bench work. A pediatric AFO uses 1.8 mill hours for every 2.6 technician hours, a ratio much higher than the lab average of 12,000 mill hours to 30,000 technician hours. The plantwide sheet therefore charges these braces too little, and jobs with little mill time, such as foot orthoses, too much. Garrison et al. (2021) note that departmental rates are worth their extra effort when departments use different bases and jobs use them in different proportions, which is exactly Fernhill's situation.
Cooper and Kaplan (1988) warned that distorted product costs lead managers to underprice complex work and overprice simple work, inviting competitors to take the simple orders. A $300 quote based on Sheet 1 would be a small example of that error.
Bid Memo
To: Owner, Fernhill Orthotic Lab
Subject: Bid on the pediatric clinic's forty AFOs
Recommendation: quote $395 a brace, $15,800 for the order, with delivery scheduled outside November and December.
The departmental sheet puts the full cost of each brace at $329.80, and our usual markup of 25 percent on full cost would give $412. The plantwide sheet's $280.40 understates mill use and should not guide the price. A quote of $395 is about 6 percent below list, earns about $65 a brace above full cost and reflects that one order of forty lets us schedule the mill in a single block.
The clinic's $300 budget would cover the braces' incremental cost, about $165 for materials, labor and variable overhead, but it would not cover the mill and engineering capacity they use. The job needs 72 mill hours, which fit in our spare capacity only if they avoid the year-end rush. If the clinic becomes a recurring customer at $300, the work would occupy mill time that adult AFOs earn more on, as the Unit 1 insole analysis showed.
If the clinic cannot reach $395, we could accept a floor of $345, about 5 percent above full cost, in exchange for a twelve-month commitment of at least 160 braces and flexible delivery dates. Datar and Rajan (2021) caution that one-time pricing based on incremental cost becomes a loss if the customer expects the same price on every future order, so any discount should be written as a contract term rather than a one-off.
What Would Change the Bid
A clear gap in mill capacity, such as a slow quarter, would justify a lower first-order price to win the account. A second mill, discussed in later units, would also lower the digital rate. Until then, mill hours are the lab's scarcest resource, and the bid should price them.
References
Cooper, R., & Kaplan, R. S. (1988). Measure costs right: Make the right decisions. Harvard Business Review, 66(5), 96-103.
Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial accounting (17th ed.). McGraw Hill.
GB519 Unit 4 instructions, in plain terms
GB519 Unit 4 asks you to cost a job and use the result to price it. Show direct materials and direct labor once, since they do not depend on the overhead method. Derive a plantwide overhead rate from estimated overhead and its base, and apply it. Then split overhead into departmental pools with their own bases, derive each rate and apply them. Compare the two job costs and explain why they differ in terms of how the job uses each department. Close with a bid memo that recommends a price, distinguishes full cost from incremental cost, and states the conditions under which a lower price would be acceptable. Cite managerial accounting sources in APA 7.
How the GB 519 Unit 4 example is put together
The problem introduces the pediatric clinic's forty braces, its $12,000 budget and the 1.8 mill hours each mold needs. Materials of $2,480 and labor of $3,536 are shown once. Sheet 1 applies $50 per technician hour for a total of $11,216. Sheet 2 derives $65 per mill hour from a $780,000 digital pool and $24 per technician hour from a $720,000 floor pool, for $13,192, and the highlighted sentence explains the $49.40 gap. A section cites Garrison and colleagues on departmental rates and Cooper and Kaplan on distorted costs. The bid memo recommends $395, compares it with about $165 of incremental cost and offers a $345 floor for 160 braces a year, citing Datar and Rajan.
Where the points sit in the GB519 Unit 4 rubric
GB519 rubric credit for this problem rests on rates derived correctly and a bid grounded in them. Each rate should be shown from its overhead pool and base. Applying the departmental rates to the job's own use of each base, and explaining why the totals differ, shows understanding. The bid memo carries significant weight: it should recommend a price, separate full cost from incremental cost and explain when a lower price makes sense. Conditions tied to capacity and commitment show judgment. In APA 7 the problem cites Garrison on departmental rates, Cooper and Kaplan on cost distortion and Datar and Rajan on one-time pricing.
GB519 Unit 4 help: mistakes that cost points
Many GB519 Unit 4 problems build two cost sheets correctly and then quote the lower figure. Others price the job at incremental cost without asking whether capacity is scarce. A frequent gap is the explanation: the sheets differ because the job uses one department far more than average, and the memo should state that plainly. Some writers ignore that a first-order price often becomes the expected price. Show prime cost once, derive each rate, apply them, explain the gap, and recommend a price with conditions. Grader comments in this unit often ask which department drives the job, and a one-line ratio, here 1.8 mill hours for every 2.6 technician hours against the lab average of 0.4, answers that directly.
Get a GB519 Unit 4 example written to your instructions
Send the Unit 4 job data your section provided, the overhead estimates and allocation bases, and the rubric. The cost sheets are built under every method the instructions name, the rates are derived in the open, and the result ends in a price or decision stated plainly. It comes back in 24-48h, with the first custom sample free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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GB519 Unit 4 questions, answered
Does the problem need journal entries?
Only if the instructions ask for them. Many GB519 sections focus job costing problems on cost sheets, rate derivation and pricing rather than recording, since the course is aimed at managers who read costs rather than book them. When entries are required, the sample adds them after the cost sheets and ties each one to a sheet total.
Where can I find a free GB519 Unit 4 sample paper?
This page carries a full GB519 Unit 4 job costing problem for forty pediatric braces, with plantwide and departmental cost sheets, a bid memo and APA 7 references.
Why do the two cost sheets differ?
The plantwide rate charges overhead only by technician hours, but these braces need 72 mill hours, a far higher share of mill time than the average job. Departmental rates charge for the mill time the job actually uses.
Can the lab accept the clinic's $300 budget?
It covers the braces' incremental cost of about $165 but not the mill and engineering capacity they use. At $300 as a recurring price, the work would take mill time from adult braces that earn more, so the memo sets a $345 floor tied to a volume commitment.
Why quote $395 instead of the usual markup price of $412?
An order of forty lets the lab schedule the mill in one block, and $395 still earns about $65 a brace above full cost while staying close to the clinic's expectations.