Question

Equivalent units represent the production of a process in terms of ________ units.

• A. Completed
• B. Total Production
• C. Semi-finished
• D. Both A and C

Answer 1

The correct option is A Completed

Concept of equivalent units is used in process costing. In cost accounting equivalent units are the units in production which are converted in to completed units in terms of their % completion.

For example if there are 1500 units which are in process, of which 1000 units are completed at 50% and 500 units are completed at 75% stage.

Equivalent units are calculated as:

Units % completion Equivalent units

1000 50% 500

500 75% 375

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1500 875

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