ECONOMICS

Detailed explanation-1: -Equivalent units describe how much work has been done on a certain number of physical items. To simply calculate equivalent units, you can multiply the number of physical items by the percentage of the work done on them. For two items that are 50% done, you would have one equivalent unit (2 x 50% = 1).

Detailed explanation-2: -Equivalent units of production are used to determine the cost per unit of completed products. Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

Detailed explanation-3: -In process costing, the equivalent units are calculated for easy allocation of manufacturing costs to fully and partially completed units produced. This is used for calculating the number of units at the end of the period.

Detailed explanation-4: -The equivalent units are calculated to account for work-in process inventory and the percentage completion with respect to material costs and conversion costs. The conversion cost is defined as the sum of direct labor cost and overhead cost.

Detailed explanation-5: -Equivalent units-a measure of the amount of work done during a period expressed in terms of fully complete units of. output. Number of. Number of partially.