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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.
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.