ECONOMICS

Detailed explanation-1: -Equivalent units of production refer to the number of units that could have been started and completed given the costs incurred during the period.

Detailed explanation-2: -If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-Process Inventory, then the units transferred out are: more than the units started during the period.

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: -Equivalent units for a process costing system using the FIFO method would be equal to: a. units completed during the period, plus equivalent units in the ending work in process inventory.