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The activation-synthesis theory proposes that:
Direct Labor
The labor costs that can be directly traced to the production of specific goods or services.
Activity Level
Activity level refers to the volume of production or operations within a specific period, influencing costs and budgeting in cost accounting.
Revenue And Spending Variance
The difference between the actual revenue and spending versus the budgeted amounts, indicating whether a business is over or under its budgeted figures.
Operating Income
The profit realized from a business's operations after subtracting operating expenses from revenues.
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