Absorption costing includes all fixed manufacturing costs in product costs, but variable costing expenses all fixed manufacturing costs.
What does Variable mean?
A variable is a data storage container that can be changed during the execution of a program. Variables are used to store data such as numbers, strings, objects, and other types of data. They can also be used to store calculation results or as a flag to indicate a specific condition in a program.
What does Absorption costing mean?
Absorption costing is an accounting method that determines the total cost of a product by accounting for all fixed and variable production costs, as well as overhead costs. It includes the costs of materials, labor, overhead, and other expenses related to the product's creation. The cost of the product is then divided by the costs of production, overhead, and other expenses to arrive at the total cost.
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