An equivalent unit is calculated by
A)dividing the number of physical units by their percentage of completion.
B)multiplying the number of physical units by their percentage of completion.
C)dividing the number of physical units into direct materials and conversion costs.
D)subtracting the number of physical units in ending Work in Process Inventory from the total number of physical units.

Question

Quizplus · Accepted Answer

An equivalent unit is a unit of production that takes into account the percentage of completion for both direct materials and conversion costs. To calculate it, we multiply the number of physical units by their percentage of completion for each cost category (direct materials and conversion costs). So, choice B is the correct answer.

An Equivalent Unit Is Calculated by