Explain in simple terms the notion of equivalent units of production(EUP). Why is it necessary to use EUP in process costing?© BrainMass Inc. brainmass.com June 4, 2020, 12:45 am ad1c9bdddf
Equivalent units are the amount of resources required to complete a full unit. It is used when batches or a process is stopped prior to completion and it is necessary to figure out the cost per unit. You compute EUP by multiplying the number of partial ...
This is a typically difficult concept and this discussion boils it down and gives you an example to try to create a picture in your mind.