Using conversion cost per equivalent unit is appropriate for many business that use process costing because:
A)Direct materials and direct labor are usually entered into the production process at the same rate.
B)All manufacturing costs are entered into the production process in the same period.
C)Equivalent cost per unit is not sufficient measurement of production activity.
D)The weighted average method of calculating equivalent units requires it.
E)Direct labor and factory overhead enter the production process at the same rate.

Question

Quizplus · Accepted Answer

Direct labor and factory overhead are often combined into conversion costs because they are incurred at the same rate throughout the production process, making it appropriate to use conversion cost per equivalent unit in process costing.

Using Conversion Cost Per Equivalent Unit Is Appropriate for Many