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Absorption Costing
A method of accounting that incorporates both variable and fixed manufacturing expenses into the pricing of a product.
Operating Income
Income from a company’s everyday business operations, calculated before taxes and interest.
Absorption Costing
A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a produced unit.
Unit Product Cost
The total cost, including materials, labor, and overhead, divided by the number of units produced.
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