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Variable Costing
An accounting method that only includes variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.
Absorption Costing
A product costing technique that adds up all manufacturing expenses — direct materials, direct labor, variable, and fixed overheads — into the comprehensive cost of the product.
Net Operating Income
The total profit of a company after operating expenses are subtracted from operating revenues.
Variable Costing
A costing method in which all variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) are treated as product costs, while fixed overhead is treated as a period cost.
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