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Equivalent Units
The product of the number of partially completed units and their percentage of completion with respect to a particular cost. Equivalent units are the number of complete whole units that could be obtained from the materials and effort contained in partially completed units.
Conversion Costs
The combined costs of direct labor and manufacturing overheads, representing the costs to convert materials into finished goods.
Weighted-Average Method
A cost accounting method that averages the costs of all goods available for sale during the period, regardless of when they were acquired or produced.
First-In, First-Out Method
A method of inventory valuation where the oldest inventory items are recorded as sold first, with the most recent costs remaining in inventory.
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