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Absorption Costing
A bookkeeping technique that encases the entirety of manufacturing expenses such as direct materials, direct labor, along with both variable and fixed overhead costs, in the product’s cost.
Divisional Segment Margin
A measure of the profitability of a specific division or segment within a company, usually calculated as the division's earnings before interest and taxes divided by its revenues.
Net Operating Income
A company's revenue minus its operating expenses, not including taxes and interest charges.
Common Fixed Expense
Costs that do not change with the level of production or sales within a certain range, and are shared across multiple departments or products.
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