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Variable Costing
An accounting approach where only variable manufacturing costs are included in product costs, excluding fixed manufacturing overhead.
Fixed Costs
Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.
Absorption Costing
An accounting method that includes all manufacturing costs, both fixed and variable, in the cost of a product.
Variable Costing
A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.
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