The number of equivalent units of production:
A)Is equal to the number of units completed by a department.
B)May not be greater than the number of units completed by a department.
C)Is used to complete the overhead application rate.
D)May be less than,equal to,or greater than the number of physical units completed during the period.

Question

Quizplus · Accepted Answer

The number of equivalent units of production may be less than, equal to, or greater than the number of physical units completed during the period. This is because it takes into account the degree of completion of partially completed units, which affects the amount of materials, labor, and overhead that have been applied to each unit. Therefore, the equivalent units of production is a measure of the workload that needs to be accounted for when calculating the cost of production.

The Number of Equivalent Units of Production