2,000 units are in a process that is 75% complete for conversion costs.To what are these units referred?
A)1,500 equivalent units of production
B)500 process units
C)2,000 completed units
D)1,500 physical units of production

Question

Quizplus · Accepted Answer

These units are referred to as equivalent units of production because they are partially completed and need to be converted to their finished state. The fact that the process is 75% complete means that only 75% of the work to convert these units to their finished state has been done. Therefore, the equivalent units of production would be 75% of the 2,000 physical units, or 1,500.

2,000 Units Are in a Process That Is 75% Complete