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absorption costing

Line breaks: ab¦sorp|tion cost|ing

Definition of absorption costing in English:

noun

[mass noun]
A method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.
Example sentences
  • The argument for using absorption costing in external reports seems to be based on the matching principle.
  • The ATO opinion was that full absorption costing was necessary for all retail and wholesale businesses.
  • This is not to say that there is no role for absorption costing in business.

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