Final answer:
The equation mentioned in the question is used in accounting to calculate the equivalent units of production.
Step-by-step explanation:
The subject of this question is Accounting. The equation mentioned in the question is used in accounting to calculate the equivalent units of production.
Equivalent units represent the number of fully completed units that could have been produced with the resources used during a period. The equation given in the question is used to calculate the equivalent units of production by considering the equivalent units in beginning work in process, the equivalent units of work done in the current period, the equivalent units completed and transferred out in the current period, and the equivalent units in ending work in process.
For example, if in the beginning there were 500 units in work in process and 1,000 units were completed during the period, then the equivalent units in beginning work in process would be 500, while the equivalent units completed and transferred out in the current period would be 1,000. If at the end of the period there were 200 units in work in process, then the equation would be: equivalent units in beginning work in process (500) + equivalent units of work done in the current period (X) = equivalent units completed and transferred out in the current period (1,000) - equivalent units in ending work in process (200).