# ECONOMICS

## COST ACCOUNTING

### PROCESS COSTING

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Equivalent units of output are the partially completed units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.
 A True B False
Explanation:

Detailed explanation-1: -Equivalent units of output are the partially completed units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.

Detailed explanation-2: -Equivalent units of production are equal to: b. number of units worked on during the period by a production department. Equivalent units are the estimated number of units worked on during the period. They are computed by multiplying the physical units by the percentage worked on during the period.

Detailed explanation-3: -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-4: -It is the number of completed units of an item that a company could theoretically have produced, given the amount of direct materials, direct labor, and manufacturing overhead costs incurred during that period for the items not yet completed.

Detailed explanation-5: -Equivalent units = Number of physical units × Percentage of completion. For direct materials, 3, 000 equivalent units = 5, 000 physical units × 60 percent complete; for direct labor and overhead, 1, 500 equivalent units = 5, 000 physical units × 30 percent complete.

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