Equivalent units of production are calculated because
A) some units in ending work-in-process are incomplete at the end of the period.
B) sometimes departments switch from job order costing to process costing, and must recalculate units.
C) the number of equivalent units must always equal the total number of physical units
D) the equivalent cost per unit is used to determine the manufacturing overhead rate.

Question

Quizplus · Accepted Answer

Equivalent units of production are calculated because some units in ending work-in-process are incomplete at the end of the period, and therefore cannot be counted as fully completed units. The equivalent units of production measure the amount of work that has been done on these partially completed units, so that they can be included in the calculation of the cost per unit of production.

Equivalent Units of Production Are Calculated Because