Examlex
What is the 'driving force'?
Absorption Costing
A bookkeeping approach that encompasses all production expenses, including direct materials, direct labor, and all overhead costs, both variable and fixed, in the price of a product.
Operating Income
The profit realized from a business's operations after subtracting operating expenses like wages, depreciation, and cost of goods sold.
Variable Costing
A costing method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold and treats fixed overhead as a period expense.
Activity Base
A measure used to assign costs in activity-based costing, reflecting the volume of activity that drives costs.
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