Equivalent units of production are equal to:
A) Physical units that were started and completed during a period.
B) The number of units that could have been started and completed given the costs incurred during the period.
C) The number of finished units actually produced during a period.
D) The number of units still in process at the end of a period.
E) The number of units started into the process during a period.

Question

Quizplus · Accepted Answer

Equivalent units of production are a measure used in process costing to express the total amount of partially completed units as a proportion of fully completed units that could have been produced given the costs incurred during a period. This calculation takes into account the stage of completion of partially completed units, and allows managers to compare the costs of production between different departments or periods. Therefore, the correct answer is B.

Equivalent Units of Production Are Equal To