The number of equivalent units of production assigned to ending goods in process inventory should usually be equal to or less than the number of physical units in ending goods in process inventory.

Question

Quizplus · Accepted Answer

This is because the equivalent units of production take into account the degree of completion of the units in process inventory, meaning that some units may not be fully completed and therefore cannot be counted as a full physical unit. As such, the equivalent units will usually be equal or less than the physical units.

The Number of Equivalent Units of Production Assigned to Ending