This paper focuses on how to determine the finishing level used in calculating the equivalent production units in the continuous process costing system. The hypothesis was established that cost accounting theory does not offer an objective solution for the calculation of the finishing level and, consequently, enterprises do not adopt the fundamental theoretical concepts about the inventory evaluation of goods in process and finished goods in continuous production industries. A collection of classic cost accounting works was revised¹ , which revealed that there does not exist any objective indication about how to measure the finishing level. In this paper, a method for finishing level measurement is presented and an exploratory study is developed, which aims at obtaining practical knowledge about the reality of the enterprises in relation to the subject discussed in this paper. The bibliographical and empirical researches indicate the validity of the hypothesis established.
Equivalent production units; finishing level; continuous production; activity-based production; cost accumulation; inventory valuation
