In a process costing environment, equivalent units of production must be calculated because:

		In most cases, there is no difference between physical units and equivalent units of production.
		Companies often use a combination of a process costing and job order costing systems.
		In most manufacturing environments, it is not possible to conduct a physical count of units.
		Not all production units are 100% complete and ready to move to the next stage of production at the end of an accounting period.