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Absorption Costing
An accounting method that includes all direct costs and fixed and variable overhead costs in the cost of a product.
Net Income
The company's net income following the deduction of all expenditures and taxes from its total revenue.
Variable Selling Costs
Costs that vary directly with the volume of units sold, such as commissions and shipping expenses.
Variable Production Costs
Expenditures that change in direct correlation with production volumes, like direct labor and raw materials used.
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