Acc 561 production cost.docx - Running Head Production...

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Running Head: Production Costs Production Costs Course No Name Date
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1 Production Costs Production Costs To: The Production Manager, David Skaros From: Supervisor, Accounting Department Date: 14 th August, 2017 Subject: Equivalent Units in Ending Inventory Respected Sir, Thank you for putting your point forward in respects to the 2,000 equivalent units in ending inventory of the production cost report. It is reasonable, that someone in your position would make sure an accurate record keeping of inventory and production. I can also assure that there has been no miscalculation on the production cost report sent to your department. The inventory count shown in the production period is not the actual inventory; it is the equivalent units of production, which is a measure of cost and efforts, both partially and fully completed units processed during an accounting period. Equivalent units of production are always lower than the actual inventory, if the ending inventory is not complete in respect with any of component of cost such as direct material, labor and manufacturing overhead.
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