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Explain the optimum arousal theory.
Conversion Costs
Expenses directly related to the transformation of raw materials into finished goods, typically including both labor and manufacturing overhead.
First-In, First-Out
An inventory valuation method where the oldest inventory items are recorded as sold first, ensuring that the costs recorded are of the oldest products.
Assembly Department
A specific section in a manufacturing company where parts are assembled into final products.
Conversion Costs
The combined cost of direct labor and manufacturing overhead, representing the expenses necessary to convert raw materials into finished goods.
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