Production Cost

User Generated

Pryrfgr1990

Business Finance

Description

Purpose of Assignment

The materials covered this week distinguish between the different costing methods and provides needed tools for decision making. This case study focuses on determining equivalent units in a production business setting.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Committee (SEC)

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Scenario: Davis Skaros has recently been promoted to production manager. He has just started to receive various managerial reports, including the production cost report you prepared. It showed his department had 2,000 equivalent units in ending inventory. His department has had a history of not keeping enough inventory on hand to meet demand. He has come to you, very angry, and wants to know why you credited him with only 2,000 units when he knows he had at least twice that many on hand.

Prepare a maximum 700-word informal memo and explain to Mr. Skaros why his production cost report showed only 2,000 equivalent units in ending inventory. Using a professional tone, explain to him clearly why your report is accurate.

Format the assignment consistent with APA guidelines.

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Explanation & Answer

Please find answer.Thank you.

Running head: PRODUCTION COST

1

Production Cost
Name
University Name
Course
Sept 23, 2017

PRODUCTION COST

2

MEMORANDUM
To: Davis Skaros, Production Manager
From: xyz, Senior Accountant
Date: Sept 23, 2017
Subject: Determining equivalent units in production business setting
An equivalent unit in production business setting represents the amount of work that
is being done by the manufacturers who have partially completed units on hand at the end of
the accounting period (Kimmel, Kieso, Weygandt & Fewox, 2011).The report indicated
presence of...


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