A finished ACC-360 Topic 4 overhead base selection memo example, testing labor hours and machine hours against the contents of one overhead pool and recommending the base that follows the cost. Searches like "acc 360 topic 4 assignment example", "acc360 topic 4 sample" and "acc-360 topic 4 example" land here.
What a finished ACC-360 Topic 4 overhead base selection memo looks like
The finished memo opens by breaking the overhead pool into what it buys. Of the illustrative $480,000, $336,000 is machine depreciation, power, tooling and maintenance, and $144,000 is supervision and shop supplies. That split carries the argument: most of the pool is consumed by running machines, not by people working. The memo then applies both candidate bases. At $30 per labor hour, hand-welded railings absorb $300,000 and CNC brackets $180,000. At $20 per machine hour, railings absorb $80,000 and brackets $400,000. Total overhead is the same both ways, and only its placement moves. The memo recommends machine hours if one base must be used, and shows a two-pool alternative that charges each part of the overhead on its own driver, giving $146,000 and $334,000.
How an ACC-360 Topic 4 example is structured
Its recommendation appears in the memo's opening paragraph, ahead of any rate. The two product lines are described next, with how each is made, since the base question only matters because they consume resources differently. The overhead pool is then broken into its components, and each is classed by what makes it grow, machine running time or crew time. Both single-base rates follow, computed and applied to each line in one table. After the table, the memo argues from the pool's composition that machine hours track the larger share of cost, and it names the evidence that would weaken that claim. A two-pool alternative is set out with its figures, along with the point that it needs no data the shop does not already record. Last, the memo names the product line whose quoted cost will change most and hands that forward to sales.
The pool broken into components
Depreciation, power, tooling and maintenance are separated from supervision and supplies, because a base can only be defended against what the overhead actually buys.
Each component tied to a driver
Every cost in the pool is classed by what makes it rise, machine running time or crew time, which turns the base choice into a factual question.
Both bases applied side by side
Railings absorb $300,000 under labor hours and $80,000 under machine hours, and the table shows that total overhead is identical in both columns.
Evidence that would weaken the claim
The memo notes that if maintenance followed crew shifts rather than machine hours, part of the case for machine hours would fall, and names the check that would settle it.
A two-pool alternative priced
Charging machine costs at $14 per machine hour and crew costs at $9 per labor hour uses records the shop already keeps and follows both drivers.
Where marks go in ACC-360 Topic 4
Picking a base because it is conventional, or because the data is easy to collect, is where this memo usually goes wrong. Labor hours were once the obvious choice in many shops, and keeping them after the work moved onto machines charges the hand-welded line for equipment it barely uses. Arguing for a base without breaking down the pool leaves the reader with an assertion, since the only evidence for a base is what the costs consist of. Papers that apply one base and never compute the other cannot show how much the choice matters. Treating the change as a change in total overhead is a conceptual error, because the pool stays at $480,000 and only its distribution shifts. A recommendation that ignores the inexpensive two-pool option presents the controller with a false choice between two single rates.
Get an ACC-360 Topic 4 example written to your instructions
Send the ACC-360 Topic 4 instructions, the classroom rubric and the overhead and activity data in your case. A custom example follows, built to those criteria, with the pool broken into components, each tied to a driver, both bases applied, the recommended base argued and a multiple-pool alternative considered, back to you in 24 to 48 hours. The first is free.
ACC-360 Topic 4 questions, answered
How do I show that a base drives the cost?
Start with what the overhead buys and ask what makes each piece grow. Power and machine maintenance rise with machine running time; supervision rises with crews on the floor. Where monthly data is available, check whether the cost and the proposed base move together over time. A base that tracks a small slice of the pool, while the rest moves with something else, is the wrong base even if it is convenient.
Is a plantwide rate ever acceptable?
Yes, when the products consume overhead in similar proportions or when overhead is minor next to materials and labor. In those conditions any reasonable base gives similar answers and a single rate saves effort. The case for separate rates grows as product lines differ in how they are made, and a memo should say which situation the company is in rather than assume the more elaborate answer.
Will changing the base change reported profit?
For the company as a whole, only through inventory timing, since total overhead is the same under either base. For individual product lines, substantially, because each line's share of overhead moves. That is why the base matters: product costs feed quotes, product line reviews and inventory values, and a base that misplaces overhead misinforms all three while leaving the company total unchanged.