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Direct Materials
Raw materials that are traceable directly to the manufacturing of a product.
Absorption Costing
A method of cost accounting that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of a product.
Cost Per Unit
The complete cost associated with manufacturing, storing, and selling a single unit of a product or service.
Finished Goods
Inventory items that have completed the manufacturing process and are ready for sale to customers.
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