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Your brother has a bacterial infection. He tells you he going to the gym where he plans to sit in the sauna for an hour. He thinks that this will cure his infection, because the heat in the sauna will denature the enzymes of the bacteria making him ill. You are a nursing student who is currently studying microbiology. You tell him that
Unit Product Cost
The total cost (including materials, labor, and overhead) divided by the number of units produced, indicating the cost to produce each unit of product.
Absorption Costing
A cost accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.
Unit Product Cost
The total cost (both variable and fixed costs) associated with producing a single unit of a product.
Variable Costing
A method of inventory costing that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, excluding fixed manufacturing overhead.
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