11.In most process costing systems, the number of units "in process" at any one time is usually significant relative to the total production output of the period.
12.As costs flow from one production department to the next in a process costing system, one Work in Process Inventory account shows all the changes to the units in production.
13.An equivalent unit measures the percentage of a completed unit's cost that is present in a partially finished unit.
14.The number of equivalent units of production during a period may be greater than, equal to, or smaller than the actual number of units completed and transferred to the finished goods warehouse.
15.Completing 3,000 units which were each 75% complete at the beginning of the period represents 2,250 equivalent units of work during the current period.
If at the beginning of the period 3,000 units were 75% completed, then to complete these units during the current period, the equivalent units = 3,000 × (100% - 75%) = 750 equivalent units.
16.Equivalent units of production significantly differ from units completed and transferred during the period only when no significant differences exist between beginning and ending work in process.
17.In a process costing system that uses equivalent units of production, the per-unit cost of direct materials equals the total cost of materials used in the current month divided by the number of units completed and transferred during the current month.
18.The cost transferred to Cost of Goods Sold is equal to the total manufacturing costs incurred for the units sold.
19.In a production cost report, the units in beginning Work in Process are always expressed as equivalent units.
20.The production cost report is an estimate of the equivalent units completed during the period.
21.In a production cost report, the units transferred out refer to the equivalent units completed during the period that have been moved to the next department or to Finished Goods Inventory.