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Fixed Costs
Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance premiums.
Absorption Costing
A costing method that includes all manufacturing costs, both fixed and variable, in the cost of a product.
Variable Costing
An accounting method that includes only variable production costs (costs that change with the level of output) in the cost of goods sold, highlighting the impact of production volume on profitability.
Variable Costing
An accounting method that includes only variable costs—costs that change with production levels—in the cost of production.
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