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Unit Variable Expenses
Costs that vary directly with the level of production or sales volume, calculated on a per unit basis.
Fixed Expenses
Costs that do not fluctuate with changes in production level or sales volume, such as rent and salaries.
Absorption Costing
A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead in the cost of a product.
Net Operating Income
The total operating profit of a company after all operating expenses, excluding taxes and interest expenses, have been deducted from total revenue.
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