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Converting incomplete units into their equivalent completed units gives
Anormal loss units
Bequivalent units
Cabnormal gain units
Dinter process units
Answer & Solution
Correct answer: B. equivalent units
1. At period end some units are still work in progress.
2. An estimate is made of the percentage completion of that work in progress.
3. Restating them as fully complete units gives the equivalent units, or equivalent production.
4. The estimate is made separately for material, labour and overheads, since completion differs by element.
_Source: ICAI Cost and Management Accounting Ch10 'Process and Operation Costing', section 10.4.1_
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