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Production Cost Report memo to May Mahr

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Mary Mahr has recently been promoted to production manager, and so she has
just started to receive various managerial reports. One of the reports she has received is
the production cost report that you prepared. It showed that her department had 1,000
equivalent units in ending inventory. Her department has had a history of not keeping
enough inventory on hand to meet demand. She has come to you, very angry, and wants
to know why you credited her with only 1,000 units when she knows she had at least
twice that many on hand.

Instructions

Explain to her why her production cost report showed only 1,000 equivalent
units in ending inventory. Write an informal memo. Be kind and explain very clearly why
she is mistaken.

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Solution Summary

Response explains the Production Cost Report memo to May Mahr to explain equivalent units of inventory

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Equivalent units in ending inventory

Ending inventory means the inventory as on the last day of the particular period. Equivalent units in ending inventory represents the number of completed units in the ...

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