Examlex
Which of the following statements is true?
Absorption Costing
This refers to an accounting strategy that comprehensively adds the costs of direct materials, direct labor, and both varying and fixed overheads into the total cost of manufacturing a product.
Variable Costing
A pricing approach that incorporates solely the variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the unit cost of a product.
Fixed Overhead
Expenses that remain constant regardless of the production or sales volume, including items like lease payments, wages, and insurance premiums.
Inventory
The total amount of goods and materials held by a company for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.
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