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Question
An equivalent unit of material or conversion cost is equal to __________.
An equivalent unit of material or conversion cost is equal to __________.
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Solution
The correct option is A the amount of material or conversion cost necessary to complete one unit of production.
Equivalent production term is applied to the work in progress at the end of accounting period. Its an indication of the amount of work done by a manufacturer who have partially completed units. Basically, fully completed units and partially completed units are expressed in terms of fully completed units.
for Example:Units completed 6000Units partially completed 2000 (50% work is completed)
Equivalent Production will be:No of Units % completion Equivalent Units6000 100% 60002000 50% 1000Total Equivalent Production 7000
Equivalent production term is applied to the work in progress at the end of accounting period. Its an indication of the amount of work done by a manufacturer who have partially completed units.
Basically, fully completed units and partially completed units are expressed in terms of fully completed units.
for Example:
Units completed 6000
Units partially completed 2000 (50% work is completed)
Equivalent Production will be:
No of Units % completion Equivalent Units
6000 100% 6000
2000 50% 1000
Total Equivalent Production 7000
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