absorption costing
noun
  1. a form of costing for a product that includes both the direct costs of production and the indirect overhead costs as well

  2. an accounting practice in which fixed and variable costs of production are absorbed by different cost centres. Providing all the products or services can be sold at a price that covers the allocated costs, this method ensures that both fixed and variable costs are recovered in full.

    See also marginal costing
Browse by Subjects
absorb
See All Related Terms »

Official List
marketing department
Eurocheque
vertical equity
discount window