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Variable Costing
An accounting method that only includes variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, with fixed overhead expenses recorded as period costs.
Inventory
The complete list of items such as property, goods in stock, or the contents of a building.
Absorption Costing
An accounting method that includes all of the costs associated with manufacturing a product in the product's cost.
Closing Inventory
The value of the goods remaining unsold at the end of an accounting period, which becomes the opening inventory for the next period.
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