Equivalents units in Process costing : In Process costing, the Equivalent units concept is important to compute the actual cost associated with the units completed during the period and units remained in process at the end. The main difference between unit completed and units in process at end is that the units completed has been processed at 100% degree with respect to each element of cost and the units in process is treated as units which may not have completed at 100% degree for some or all elements of cost till the end of period. Therefore, the equivalent units concept is important where the units in process shall be taken in line of completed units by reducing its units on the basis of degree of completion of in process units for each element of cost. The Total equivalent units of production with respect to each element of cost shall be computed as per weighted average method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 20, Problem 10QS

To determine

Equivalents units in Process costing:

In Process costing, the Equivalent units concept is important to compute the actual cost associated with the units completed during the period and units remained in process at the end. The main difference between unit completed and units in process at end is that the units completed has been processed at 100% degree with respect to each element of cost and the units in process is treated as units which may not have completed at 100% degree for some or all elements of cost till the end of period. Therefore, the equivalent units concept is important where the units in process shall be taken in line of completed units by reducing its units on the basis of degree of completion of in process units for each element of cost.

The Total equivalent units of production with respect to each element of cost shall be computed as per weighted average method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Please provide the solution to this general accounting question with accurate accounting calculations.

I need the correct answer to this general accounting problem using the standard accounting approach.

You are employed by an external audit firm that is hired by JBltd, a privately owned incorporated business. Accounting records are maintained on a computer using proprietary software. You have worked on the audit for three years and this year you are in charge of the audit. Your assistant is a newly recruited business graduate who has done an accounting course but has no practical experience. Because of the small size of the company there is limited opportunity for segregation of duties. You decide, as in previous years, that the appropriate audit strategy is to obtain evidence primarily through the performance of substantive procedures. You also plan to perform the audit around the computer as the proprietary software is known to be reliable and details of all transactions and balances can be readily printed out. On arriving at the company's premises in December 2019 to perform the final audit on the 31 October 2019 financial statements, you obtain a copy of the year end bank…