Final answer:
In a weighted-average process costing system with materials added at the end of the production process, equivalent units for materials equal to completed units plus the equivalent units in the ending work-in-process inventory. This is related to understanding variable and total costs in production.
Step-by-step explanation:
When using a weighted-average process costing system, the equivalent units for materials are calculated based on the units of production that have gone through the production process to the point at which the materials are added. Since XYZ Company adds all materials at the end of the process, the equivalent units for materials would be equal to the number of units completed during the period plus the equivalent units in the ending work-in-process inventory that are related to materials.
Since we're discussing costs and output, and materials are added at the end of the process, it's important to note that average variable costs and average total costs are key concepts in analyzing production costs. The average variable cost is calculated by dividing total variable costs by the total output at each level of output. On the other hand, average total cost is determined by dividing total costs by total output at each level of output. When a firm's average cost of production - whether it's variable or total - is lower than the market price, it suggests the firm could be generating profits, assuming other expenses, such as fixed costs, are covered.