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.
PLEASE ENSURE EVERY BULLET IS ANSWERED..
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Explanation & Answer
Attached.
Running Head: PRODUCTION COSTS
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PRODUCTION COSTS
Name
Professor
Course
Date
PRODUCTION COSTS
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Informal Memo to Mr. Skaros
To: Davis Skaros, Production Manager
From: Accounting Department
Date: 7/11/2017
Subject: Ending Inventory
Mr. Skaros,
The purpose of this memo is to explain to you clearly, why your production cost report showed
only an equivalent of 2000 units in ending inventory. In response to your dissatisfaction and the
disapproval you have expressed with regards to the number of inventory units that were credited
to your department, I have determined that is imperative for me to give a clear explanation of the
issue surrounding the number of ending inventory units and the reasons why my report is
accurate.
Therefore, if the production cost report of your department showed...