ECONOMICS

Detailed explanation-1: -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-2: -Equivalent units of production are a concept used to understand how much money partially completed products are worth to a company. They are useful for process costing, which is the analysis of money flow within the manufacturing process.

Detailed explanation-3: -Which are true statements about equivalent units of production? It is calculated by adding units completed and transferred to the finishing department and product of the units in process and the percent complete.

Detailed explanation-4: -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-5: -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.