Week 5 Assignment: Production Costs To: Mr David S

Week 5 Assignment: Production CostsTO: Mr David Sakros FROM: Christina ForresterDATE: April 17, 2017SUBJECT: Equivalent Units of Production Credited To Your Department This memo is with regard to your complaint on 2,000 equivalent units ending inventory credited to your department. The purpose of this memo is to explain the apparent discrepancy between the units you have and the equivalent units credited.In cost accounting, equivalent units of production have a specific meaning which is different from the number of physical units that one can count. As you are aware ending inventory is made of units at various levels and stages of completion. Equivalent units of production are the units in production multiplied by the percentage of completion. Those units that are complete are 100 percent while those that are in process are at different percentages of completion. An equivalent unit of production represents the amount of work done by production on partially completed units on hand at the end of an accounting period. The importance of using equivalent units as a measure is so that the fully completed units and the partially completed units are expressed in terms of fully completed units.I will