Which of the following statements is true regarding cost per equivalent unit?
A)This calculation only includes variable costs.
B)This measure is used to assign costs to units transferred out.
C)This measure always stays the same from one month to the next regardless of different levels of production.
D)The formula to calculate this measure uses total equivalent units accounted for divided by total costs to be accounted for.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Cost per equivalent unit is used to assign costs to units transferred out and to equivalent units in ending work-in-process inventory. It includes both variable and fixed costs. Choice A is incorrect because it includes both variable and fixed costs. Choice C is incorrect because the cost per equivalent unit changes each period based on the level of production. Choice D is incorrect because the formula uses total costs to be accounted for, not just variable costs.

Which of the Following Statements Is True Regarding Cost Per