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Absorption Costing


Definition: Absorption Costing is an inventory valuation and costing model that includes ALL manufacturing costs (like direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a unit of product.
As a result, under absorption costing, fixed overhead is a product cost until the products are sold.


Learn more about Absorption Costing.

More on financial management: Accounts Receivable Factoring, Credit Management, Credit Rating, Customer Profitability Analysis, Debt Settlement, more on financial management...

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