Asked by Nicole Guerrero on Jul 28, 2024
Verified
Discuss how equivalent units are computed under the average cost method.
Equivalent Units
A concept in cost accounting used to express the amount of work done by incomplete units in terms of fully completed units.
Average Cost Method
An inventory costing method that determines the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.
- Calculate the expense per equivalent unit utilizing the average cost approach.
Verified Answer
RK
Rohtash KumarAug 04, 2024
Final Answer :
Under average costing, equivalent units equal:
a) all work done to date on units transferred out regardless of whether workwas completed in prior period or current period and
b) work done to start ending inventory
a) all work done to date on units transferred out regardless of whether workwas completed in prior period or current period and
b) work done to start ending inventory
Learning Objectives
- Calculate the expense per equivalent unit utilizing the average cost approach.
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