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When Matching Occurs, We Tend to

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When matching occurs, we tend to


Definitions:

Variable Costing

A costing method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a unit of product, excluding fixed overhead costs.

Absorption Costing

Absorption Costing is a method of inventory costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Inventory Decreases

A reduction in the quantity of goods or materials held in stock, which can impact production, sales, and the overall financial health of a business.

Variable Costing

An accounting method that includes only variable costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold and inventory valuation.

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