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Direct Materials
Raw materials that can be directly traced to the production of a specific good or service, considered a variable cost in manufacturing.
Fixed Manufacturing Overhead
Costs associated with production that do not change with the level of output, such as rent, insurance, and salaries of permanent staff.
Incremental Income
The additional income generated from undertaking a specific action or investment, compared to not doing so.
Variable Costs
Expenses that change in proportion to the level of production or sales activity, such as raw materials and direct labor costs.
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