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Absorption Costing
A pricing methodology that sums up all production-related costs, from raw materials and labor to both flexible and fixed overheads, in calculating the expense of a product.
Cost-plus Pricing
A pricing approach that sets the selling price by adding a predetermined markup to the cost per unit of a product.
Return on Investment
A measure of the profitability and efficiency of an investment, calculated as net profit divided by the cost of the investment.
Selling Price
The price at which a product or service is sold to the customer.
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