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Direct Materials Costs
The expenses for raw materials that are directly used in the manufacturing of a product.
Variable Costing
An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of a unit of product.
Unit Product Cost
The calculated cost to produce one unit of a product, including direct materials, labor, and overhead.
Contribution Margin
The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs and generating profit.
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