Which Statement Best Describes the Concept of Equivalent Units of Production

question 18

Multiple Choice

Which statement best describes the concept of equivalent units of production?

• A) Equivalent units are the measure of a period's output.
• B) Equivalent units are the units completed in a department.
• C) Equivalent units are the total of the units produced by all departments.
• D) Equivalent units are the number of units completed at the end of the last process.

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Definitions:

Straight Line Basis

A method of calculating depreciation and amortization that allocates an equal portion of an asset's cost to each period in its useful life.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Payroll Accrual

The process of recording salaries and wages that have been earned by employees but not yet paid by the company.

Books Closed

A term referring to the point at which an accounting period is concluded and all financial statements are finalized.