Why is it necessary to calculate equivalent units of production in a department?
A)A physical count of units is impossible.
B)A company may transfer numerous batches out during the year.
C)The physical units in the department are always 100% complete.
D)Some units worked on in the department are not fully complete.

Question

Quizplus · Accepted Answer

It is necessary to calculate equivalent units of production in a department because some units worked on in the department are not fully complete, meaning that they are in various stages of completion. Calculating equivalent units takes into account the percentage of completion of each unit and provides a more accurate picture of the work done in the department.

Why Is It Necessary to Calculate Equivalent Units of Production