| Absorption costing | A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in unit product costs.
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| Fixed manufacturing overhead cost deferred in inventory | The portion of the fixed manufacturing overhead cost of a period that goes into ending inventory under the absorption costing method.
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| Fixed manufacturing overhead cost released from inventory | The fixed manufacturing overhead cost of a prior period that becomes an expense of the current period under the absorption costing method.
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| Variable costing | A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.
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