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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.
Absorption Costing
An accounting method that assigns all manufacturing costs, both variable and fixed, to products.
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