The number of equivalent full units of production:

Question

Quizplus · Accepted Answer

The number of equivalent full units of production takes into account the degree of completion of the units in process, and therefore it may be less than, equal to, or greater than the number of physical units completed during the period. It is used to allocate product costs to units of production, and is not necessarily equal to the number of units completed by a department, nor is it limited by this number. It is also used to complete the overhead application rate, which is calculated by dividing total estimated overhead costs by the total number of equivalent full units of production expected in the period.

The Number of Equivalent Full Units of Production