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Remember, total variablecosts change proportionately with changes in total activity, whilefixed costs do not change as activity levels change. These variablemanufacturing costs are usually made up of direct materials,variable manufacturing overhead, and direct labor. The productcosts (or cost of goods sold) would include direct materials,direct labor and overhead. Components of Absorption Costing Therefore, as production …

Income Statement Under Absorption Costing? All You Need to Know Read More »