Equivalent Units of Production
Accounting glossary · Understand, connect, apply
Equivalent units express partly completed output as an equivalent number of fully completed units for a specified cost component. They support unit-cost calculations in process costing.
Example
There are 200 unfinished units that are 40% complete for conversion. They represent 80 equivalent conversion units. If all materials have been added, their material equivalent units are 200.
Remember the difference
Calculate each cost component separately. Weighted-average and FIFO process costing handle opening work in process differently, so identify the required method before calculating equivalent units.
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Published 4 November 2026. Prepared with AI assistance; examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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