1.
Running Head: PRODUCTION COST INFORMAL MEMO1
PRODUCTION COST INFORMAL MEMO3
Production Cost Informal Memo
Your submission does not reflect the assignment, discussion in
class, or the material from the reading for Week 4. I
recommend you reread the WK 4 assignment, learning activity
material, review notes from our discussion at the end of WK 3
and rewrite your submission. You have gotten your work in
early, so I hope you have a chance to do this. As it stands, I
can not grade it. If you have any questions, please email me.
Explain cost report showing 2,000 EU – 30
Difference between physical & EU - 35
Explain how report is accurate – 40
Writing - 15

2.
Production Cost Informal Memo
To: Production Manager, David Haros
From: Accountant
Date: 25th May 2019
Subject: Ending Inventory Explanation.
Misunderstanding of ending inventory arises from the
production department. Production department uses two
distinctive routes to measure the amount of production. It is
critical to take a look at stock administration and comprehend
emerging debate from generation division. What is the emerging
debate and what is the generation division? Please define more
clearly. Appropriate stock administration entails arranging and
taking inventory. A productive inventory within an organization
helps determine, what, where, whom and why to buy products to
enhance business productivity.
Moreover, there is two clashing interest over the stock issue
from various departmental heads. The assignment is only
discussing one production manager, Mr. Skaros. Therefore
stock administration ensures to maintain stock at an equilibrium
state such that there is no understocking or over-stocking. Over-
stocking means having more supply that it is required resulting
to less stock in liquidity form, keeping them from other forms
of creation while under-stocking means having little supply
materials necessary for production thus understocking has a
potential to stop the production process. The interest in stock
should be kept in a practical limit. The main objective of stock
administration is safeguarding operational activities as they are
money related. Operational target does imply that materials
should be available and accessible in adequate amounts to
ensure that work operating ?are not affected by either
understocking or overstocking. Interesting information to
include. Demonstrates creativity with your response to the
assignment.
A departmental production cost report shows all cost chargeable
to a division departmental. A production cost report is not just a
hotspot to outline daily session's reports towards a month or a

3.
year ending, however, it is a suitable vehicle for discarding, and
displaying aggregated cost within the production cost month. A
production cost report shows the total unit cost that is
exchangeable from the first office.Do you mean department? It
also shows materials, industrial facility, and work overhead that
is included in this departmental office.? Besides, it does issues
unit cost incurred within the office?. It shows the total and unit
costs accumulated to finish operations in the office. It
illustrates the initial cost and the completion cost for work
process inventory. This part is correct. It does show unit costs
and costs in WIP It is very confusing when discussing an office
vs a department. Your terminology, such as “industrial facility”
and “work overhead” does not reflect the material in WK 4 nor
our discussions in class. It shows the costs exchanged to
complete a merchandise storeroom. It is not completing a
merchandise storeroom, it is completing a product. It also
makes it easily understand these production costs. Therefore, I
have divided the production report cost into two segments. The
first segment demonstrates the cost in which the division
responsible for the total aggregates, departmental, and unit cost.
The other segment demonstrates that environmental working
atmosphere Please define more clearly is responsible for these
production cost expenses.
Amount plan of an inventory demonstrates the aggregate
number of units in which division is responsible in the matter of
these units. Additionally, it shows some portions of every office
cost of generation report. ?The data in this timetable balanced
for the operation creation is essential to utilize to determine the
unit cost included in a division. Hence, this report shows the
cost of completing work and the cost to be exchanged out-of-
office. A cost of creation report assists in the decision-making
of occasional aggregate and unit cost. However, a report that
would only contain the aggregate expenses of work material
plant overhead and Shows the unit cost of the period will not be
suitable for controlling production cost expenses. Cost control
requires essential information in relation to transactions carried

4.
out within business organizations. The plant amount of ending
finished goods inventory is subjected to a considerable amount
of defects; therefore, having too much may lead to an obsolete
inventory. An obsolete inventory must be disposed of at a loss.
Having too little inventory can result in the loss of sales when
customers want immediate delivery. The unless the company is
planning to draw down its inventory quantities to Terminator
product, there is generally a need for some ending finished
goods inventory that I have included in the production cost
report.
Dairy production cost report shows prevalent unit measures of
work done on the physical unit. The physical production unit is
expressed in terms of fully completed units especially if you're
ending inventory claims that our organization has 4000 units,
50% of 4000 physical unit or completed is equal to 50% of 4000
units in physical units, therefore having 4000 physical unit
equal to having 2000 equivalent completed units. This explains
why the production cost report has 2000 completed units
displayed in inventory at the end of the month. These ending
inventory can be expressed as having 4000 completed you are
equally unique or 2000 equivalent units.