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Define positive relationship.
Conversion Cost
The combined costs of direct labor and manufacturing overheads, which are necessary to convert raw materials into finished goods.
Direct Materials
Key substances exclusively used in the generation of specific products or execution of services.
Period Cost
Costs that are expensed in the period in which they are incurred, typically related to selling, general, and administrative activities rather than production.
Selling and Administrative Expense
The combined total of all expenses directly related to the selling of products and the administration of a business.
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