Production Costs

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.