Equivalent units for materials may differ from the equivalent units for conversion costs.Equivalent units may differ for the two categories since their percentage of completion may differ.

Question

Quizplus · Accepted Answer

Equivalent units for materials are calculated based on the physical amount of material that has been partially or fully processed, while equivalent units for conversion costs are calculated based on the degree of completion of direct labor and manufacturing overhead. Thus, it is possible for their percentage of completion to differ and result in different equivalent units.

Equivalent Units for Materials May Differ from the Equivalent Units