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Variable Costing
An accounting method that only includes variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product cost.
Unit Product Cost
Unit product cost is the total expense incurred to produce, assemble, and prepare a single unit for sale, encompassing both direct costs and allocated overheads.
Absorption Costing
An accounting method that includes both variable and fixed manufacturing costs in the cost of a product, used for external reporting.
Unit Product Cost
The combined sum of fixed and variable expenses incurred in the creation of one unit of a product.
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