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During deflation, the:
Variable Overhead
Variable overhead refers to costs that fluctuate with production levels, such as utilities and raw materials, unlike fixed overhead costs which remain constant regardless of production volume.
Fixed Overhead
Regular, consistent expenses not directly tied to production levels, such as rent, salaries, and insurance.
Direct Labor
The wages and benefits paid to employees who are directly involved in the production of goods or services.
Direct Materials
The raw materials that are directly incorporated into a finished product during the manufacturing process.
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