ECONOMICS

Detailed explanation-1: -Absorption costing is a costing system that is used in valuing inventory. It not only includes the cost of materials and labor, but also both variable and fixed manufacturing overhead costs. Absorption costing is also referred to as full costing.

Detailed explanation-2: -Absorption costing includes all the costs associated with the manufacturing of a product. Variable costing includes the variable costs directly incurred in production and none of the fixed costs.

Detailed explanation-3: -Semi-variable costs are also called semi-fixed or mixed costs. These types of expenses are composed of both fixed and variable components. They are fixed up to a certain production level, after which they become variable. Costs remain fixed even if no production occurs.

Detailed explanation-4: -Absorbed cost, also known as absorption cost, is a managerial accounting method that includes both the variable and fixed overhead costs of producing a particular product. Knowing the full cost of producing each unit enables manufacturers to price their products.