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Definition Of Full Costing:


A managerial accountingmethod that describes when all fixed and variable costs, including manufacturing costs, are used to compute the total cost per unit.
Full costing includes these costs when computing the amount ofmoney it takes to produceand distribute one unit of output. Full costing is also known as "full costs" or "absorption costing".How a firm expensesits production and distribution costs will impact the structure of internal income statements. Because all costs incurred to sell a product are included with cost of goods sold, the firm's gross margin will be lower under the full costing method than the absorption costing method.

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