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 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.