what is the distinction between physical units and equivalent units ?

Expert Solution

ANS:

These terms used in process costing, process costing is a method of costing to recognise cost incurred in particular process which is mainly fallowed by those Industrys which requires continuess process that means two or more process to comlplete finished product like cement,oil refinary,iron industries etc

Hear physical units means actual units completed in process during that period either it is opening working progress,units completed,closeing workin progress for calculating the total number of these units no need of Degree of completion simply it is Total count of physical unis available but these not used for cost Determination in process

The concept equivalent units methods used for Determining cost per unit hear physical units in process are multiplied with Respective Degree of completion which are less units when compared to physical units But were Degree of completin is 100% physical units=Equivalent units

we calculate Equivalent units by Fallowing Two methods like FIFO,weighted average

ekkarill92 answered 2 years ago

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