In order to equitably allocate costs in a process costing system, dissimilar products are restated in terms of equivalent units by weighting the number of units produced by their market values.

Question

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In a process costing system, dissimilar products are restated in terms of equivalent units by weighting the number of units produced by their physical characteristics, such as weight or volume, not by their market values. Cost allocation is based on the same physical unit of measure for all products.

In Order to Equitably Allocate Costs in a Process Costing