Equivalent Units of Production Are Calculated Because

question 35

Multiple Choice

Equivalent units of production are calculated because

• A) some units in ending work-in-process are incomplete at the end of the period.
• B) sometimes departments switch from job order costing to process costing, and must recalculate units.
• C) the number of equivalent units must always equal the total number of physical units
• D) the equivalent cost per unit is used to determine the manufacturing overhead rate.

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Definitions:

Capital Expenditures Budget

A plan for the funds a company intends to spend on major physical assets, aimed at future benefits or investments.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, typically used to ensure that a company can meet its cash needs.

Factory Overhead Cost

This refers to the indirect manufacturing costs that are not directly tied to the production of a specific product, such as the cost of electricity for the manufacturing plant.

Supervisor Salaries

The compensation paid to individuals who are responsible for overseeing and managing teams or departments within an organization.