ECONOMICS

Detailed explanation-1: -Process costing:This is the accumulation of labor, material and overhead costs across departments or entities, with the total production cost then being allocated to individual units. Process costing is used when large quantities of the same product are manufactured, usually in long production runs.

Detailed explanation-2: -Direct costs are expenses that can be connected to a specific product, while indirect costs are expenses involved with maintaining and running a company. As a business owner, you will have a clearer understanding of how to set pricing if you can classify your costs correctly.

Detailed explanation-3: -Contribution is the amount of earnings remaining after all direct costs have been subtracted from revenue. This remainder is the amount available to pay for any fixed costs that a business incurs during a reporting period. Any excess of contribution over fixed costs equals the profit earned.

Detailed explanation-4: -Direct costing is also known as variable costing, contribution costing, and marginal costing.