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.

Scenario

Bill Raymond 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 the department had 1,600 equivalent units in ending inventory.

He has come to you, wanting to know why you credited the department with only 1,600 units when they know the department had at much more than that physical units, including those in process, on hand.

Support

• Accounting: Tools for Business Decision Making-Paul D. Kimmel; Jerry J. Weygandt; Donald E. Kieso
• Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Committee (SEC)
• Tutorial help on Exceland Word functions can be found on the Microsoft Office website. There are also additional tutorials via the web offering support for Office products.

Required

Preparea maximum 7 memo that:

• Explain why the production cost report showed only 1,600 equivalent units in ending inventory.
• create a calculation to help with your explanation.