For a firm that uses the weighted average method of process costing,which of the following must be true?
A)Physical units must be greater than or equal to equivalent units.
B)Equivalent units must be greater than or equal to physical units.
C)Physical units must be equal to equivalent units.
D)Physical units can be greater than or less than equivalent units.

Question

Quizplus · Accepted Answer

In the weighted average method, equivalent units account for the work done on both completed and partially completed units. Therefore, physical units (actual units in production) must be greater than or equal to equivalent units, as equivalent units are a fraction of physical units based on the percentage of completion.

For a Firm That Uses the Weighted Average Method of Process