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The effectiveness of this method is 96 percent (theoretical or perfect effectiveness) and 73 percent (actual effectiveness) :
Equivalent Units
A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units they represent.
Conversion Costs
Costs incurred by a company in the process of converting raw materials into finished goods, typically including labor and overhead.
Transferred Units
Refers to items or inventory that have been moved from one location, department, or stage of processing to another within a company.
Equivalent Units
A concept used in process costing that converts partially completed units into a number of equivalent fully completed units.
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