Using conversion cost per equivalent unit is appropriate for many businesses that use process costing because:
A)Direct materials and direct labor are usually entered into the production process at the same rate.
B)All manufacturing costs are entered into the production process in the same period.
C)Equivalent cost per unit is not sufficient measurement of production activity.
D)The weighted average method of calculating equivalent units requires it.
E)Direct labor and factory overhead enter the production process at the same rate.

Question

Quizplus · Accepted Answer

Conversion cost per equivalent unit combines direct labor and factory overhead costs, which are often incurred at similar rates throughout the production process, making it a useful measure in process costing.

Using Conversion Cost Per Equivalent Unit Is Appropriate for Many