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Multiply.
Equivalent Units
A concept used in cost accounting to express the amount of materials or labor that has been transformed into completed units during a period.
Direct Materials
The raw materials that are directly incorporated into a finished product, which are easily traceable and assignable to the manufacturing cost.
Conversion Costs
The total cost of converting raw material into finished goods, typically comprising direct labor and manufacturing overhead costs.
First-In, First-Out
An inventory valuation method where the first items acquired are assumed to be sold first, aiming to keep inventory valuations closely aligned with the cost of replacing inventory.
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