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Absorption Costing
A pricing strategy that encompasses all expenses associated with production, including direct materials, direct labor, as well as both variable and fixed overhead costs, in the product's price.
Operating Income
A measure of a company's profitability from its core business operations, excluding revenue and expenses from non-operational activities.
Variable Costing
A costing method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed manufacturing overhead.
Operating Income
Earnings generated from a company's standard business operations, excluding income from investments and other non-operational sources.
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