Answer: E. Process costing

Explanation: The correct answer is “Process costing”. The concept of equivalent units of production is used in process costing to assign costs to partially completed units. It allows the company to measure the amount of work done on partially finished units during a specific period and allocate costs accordingly.

Run down: Equivalent units are used in process costing to convert partially completed units into their full equivalent so that costs can be appropriately assigned. This is crucial in industries where production is continuous and involves multiple stages of completion.