Which costing system uses equivalent units in the computation of costs?

Question

Quizplus · Accepted Answer

Process costing uses equivalent units to compute costs because it deals with the production of homogeneous products over a continuous period of time, making it necessary to determine the equivalent number of complete units produced. Job costing, on the other hand, is used to calculate costs for customized or unique products, and doesn't typically rely on equivalent units. Therefore, the correct answer is B, which is process costing.

Which Costing System Uses Equivalent Units in the Computation of Costs