ECONOMICS

Detailed explanation-1: -The first step performed in preparing a production cost report is computing the equivalent units of production. Q. The physical units in a department are another name for the equivalent units of production.

Detailed explanation-2: -1] Cost Ascertainment This is one of the main criteria for cost accounting. Cost ascertainment is the process of collection of expenses and by analysis of these expenses. It links up the production of various products at their different stages of production with such expenses.

Detailed explanation-3: -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). When the items are completely finished, the number of equivalent units is equal to the physical items.

Detailed explanation-4: -Calculate cost per unit: Divide the total cost by the number of units. This calculation includes both completed units and equivalent units. So, if a business completed 4, 000 products and another 1, 000 units got halfway through production, the applicable costs would be divided by 4, 000 + (1, 000/2) = 4, 500 units.