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Solve the system.
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Direct Materials
Raw materials that are directly traceable and allocable to a finished product in the manufacturing process.
Direct Labor
Direct Labor involves the work of employees who are directly involved in the production of goods or services, considered a variable cost that changes with the level of output.
Variable Overhead
Costs that vary with the level of production output, such as utilities and materials, as opposed to fixed overhead costs.
Absorption Costing
A pricing approach that incorporates all costs of production, including direct materials, direct labor, and all manufacturing overheads, both variable and fixed, into the product's cost.
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