Production Costs Generally Accepted Accounting Principles

Anonymous
timer Asked: Jan 1st, 2018
account_balance_wallet $15

Question description

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.

Tutor Answer

Chucks574
School: UT Austin

Thank you so much

Running head: Memo

1

Memo:
Name:
Institution affiliation:
Date:

Memo

2
To: Production Manager, David Skaros
From: The Accounting Department
Date
Subject: Ending Inventory
The reason as to why you misunderstood the quantity of the ending inventory of your

department is because of the fact there exists two different ways for measuring inventory
quantity. The way information about the ending inventory will be utilized determines which way
to adopt when determining inventory quantity. The two ways in which the ending inventory can
be measured in are either in physical units or equivalent units.
Whenever the stage of completion is not regarded when determining the ending
inventory, then the inventory has been measured in physical units. This is so since, this are actual
units that are to be accounted for within a certain period with no regard to the work performed.
When determining the ending inventory in physical units, units t...

flag Report DMCA
Review

Anonymous
Outstanding Job!!!!

Similar Questions
Hot Questions
Related Tags

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors