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Which of the following provides management with the freedom to operate the business subject to any terms in the collective agreement?
Contribution Margin
The amount remaining from sales revenue after variable expenses have been deducted; this contribution covers fixed expenses and generates profit.
Absorption Costing
An accounting method that includes all direct costs and allocated overheads in the cost of a product or service, as opposed to variable costing which excludes certain overheads.
Ending Inventory
The total value of goods available for sale at the end of an accounting period or fiscal year.
Variable Costing
An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed manufacturing overhead.
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