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Variable Costing
An accounting method in which variable manufacturing costs are included in product costs, while fixed manufacturing costs are treated as expenses in the period they are incurred.
Net Operating Income
The profit a company generates from its regular, core business operations, excluding income from investments and after subtracting operating expenses.
Fixed Manufacturing Overhead
The sum of all the production costs that are not directly linked to the volume of production, such as salaries of managers and depreciation of equipment.
Absorption Costing
A method of costing that includes all manufacturing costs—both fixed and variable—in the cost of a product.
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