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Conversion Costs
Costs incurred during the transformation of raw materials into finished products, comprising of direct labor and manufacturing overhead.
Weighted-Average Method
A cost accounting method that calculates the cost per unit of inventory by considering both the cost of existing inventory and the cost of new inventory acquired, weighted by their respective quantities.
Process Costing System
is used in manufacturing where production is continuous, and costs are assigned to processes or departments, then averaged over units produced.
Work in Process
Inventory that includes goods that are in the process of being manufactured but are not yet complete.
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