Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?
A. All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period.
B. Companies often use a combination of a process costing and job order costing systems.
C. In most cases, there is no difference between physical units and equivalent units of production.
D. In most process costing systems, direct materials are added at the beginning of the process while conversion costs are added evenly throughout the manufacturing process.
E. In most manufacturing environments, it is not possible to conduct a physical count of units.
Answer: A
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