In process costing, equivalent units of production are equal to which of the following measures?

Introduction / Context:
This question comes from cost accounting, specifically process costing. In industries where production is continuous, such as chemicals or food processing, units may be partially complete at the end of a period. To assign costs correctly, accountants use the concept of equivalent units of production. This concept converts partially completed units into an equivalent number of fully completed units so that cost per unit can be calculated accurately.

Given Data / Assumptions:
- The term to be defined is "equivalent units of production".
- The options describe physical units at the end of the period, units completed, units worked on and units that could have been completed using the work done.
- We assume a standard process costing environment where some units are in beginning work in process and some remain in ending work in process.

Concept / Approach:
Equivalent units of production represent the number of complete units that could have been produced given the amount of work actually done in a period. For example, if a department has 100 units that are 50 percent complete, they are equivalent to 50 fully completed units. This measure allows the accountant to combine completed units and partially completed units into a single figure for cost allocation. It is not simply the number of units in work in process or the number physically present at the end of the period. Instead, it is a conceptual conversion of all work performed into fully complete unit equivalents.

Step-by-Step Solution:
Step 1: Recall that equivalent units are based on the work done, expressed as full units. Step 2: Examine the option that defines equivalent units as "number of whole units that could have been completed if all work done during the period had been used to produce only finished units". This aligns with the standard definition. Step 3: Recognise that simply counting units physically present at period end does not account for their degree of completion. Step 4: Note that counting only completed units or units worked on does not reflect partial completion levels and therefore does not match the equivalent unit concept. Step 5: Select option A as the correct description.

Verification / Alternative check:
Consider a simple example. During a month, a department completes 1,000 units and also has 200 units in ending work in process that are 25 percent complete. Work done on ending work in process equals 200 * 25 percent = 50 equivalent units. The total equivalent units for the period are 1,000 completed units plus 50 equivalent units from work in process, equalling 1,050 equivalent units. This is exactly "the number of whole units that could have been completed if all work done during the period had been used to produce only finished units". The other options do not capture this conversion.

Why Other Options Are Wrong:
Option B refers to identifiable units at period end, but these may be in various stages of completion and do not by themselves represent equivalent units.
Option C counts only units completed and transferred out, ignoring work done on partially completed units, so it understates total work performed.
Option D counts all units on which any work was done, regardless of the extent of completion, and therefore overstates equivalent fully completed units if used without adjustment.

Common Pitfalls:
Students often confuse physical units with equivalent units and may incorrectly think that ending work in process units count the same as completed units. Another pitfall is to ignore the degree of completion and simply add completed units and work in process units together. To avoid these mistakes, always remember that equivalent units are a conversion of actual work done into full unit equivalents, requiring multiplication by percentage of completion for each batch of partial units.

Final Answer:
Equivalent units of production are equal to the number of whole units that could have been completed if all work done during the period had been used to produce only finished units.