Why Is It Necessary to Calculate Equivalent Units of Production

question 18

Multiple Choice

Why is it necessary to calculate equivalent units of production in a department?

• A)A physical count of units is impossible.
• B)A company may transfer numerous batches out during the year.
• C)The physical units in the department are always 100% complete.
• D)Some units worked on in the department are not fully complete.

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Definitions:

Temporary Surplus

A situation where the supply of a product exceeds its demand for a short period of time.

Usury Laws

Usury laws are regulations governing the amount of interest that can be charged on loans, aimed at preventing exorbitant or unfair interest rates.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity to protect consumers from rapid price increases.

Price Floor

A minimum allowable price set above the equilibrium price, preventing the market price from falling below a certain level.