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Absorption Costing
A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.
Manufacturing Margin
The difference between the sales revenue generated from manufactured goods and the cost of goods sold (COGS) associated with producing those goods.
Variable Costing
A method of accounting that encompasses only the variable costs of production, such as direct materials, direct labor, and variable overhead, in the computation of product costs.
Net Income
The net earnings of a business once all costs and taxes are subtracted from its total income.
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