ECONOMICS

Detailed explanation-1: -When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing. Companies often use a combination of a process cost and a job order cost system, called operations costing.

Detailed explanation-2: -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-3: -Answer and Explanation: The cost per equivalent unit is often determined separately for direct materials and conversion costs because these costs are typically incurred at different stages of the production process.

Detailed explanation-4: -Equivalent Units of Production Under the FIFO method, we will calculate equivalent units for 3 things: Units completed from beginning work in process, units started and completed this period and units remaining in ending work in process.

Detailed explanation-5: -Equivalent units is a cost accounting concept that is used in process costing for cost calculations. It has no relevance from an operational perspective, nor is it useful for any other type of cost derivation other than process costing.