Question

4) EUP analysis is usually applied to a) Direct materials and conversion costs b) Direct materials cost only c) Conversion cost only d) Overhead costs

Answer 1

A) This sentence is correct.
Because, Equivalent units of production are usually applied directly to materials and all other conversion production costs, since the production process is the first direct materials, so all the other costs are incurred and the materials continue their work with the production process. Therefore, the equivalent units for direct products generally appear to be higher than other production costs.

B) This sentence is incorrect.
Because, Equivalent units of production usually apply not only to the cost of direct materials, but also to all other costs, because directly at the beginning of the production process, when the material is added, all other costs are applied to the product's equivalent units.

C) This sentence is incorrect.
Because, units of production equivalent in the analysis, considering the above two sentences, conversion value alone does not apply.

D) This sentence is incorrect.
Because, the equivalent units working in this process are different for direct materials, direct personnel and product overhead, the components of the product can be accessed in three different processes.