ABSORPTION PRICING Definition

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ABSORPTION PRICING is where all costs, both fixed and variable; plus a percentage mark-up for profit; are recovered in the price.

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UNALLOCATED COSTS represents corporate costs not associated either directly or indirectly in providing a product or service for sale. Unallocated costs are not included in the calculation of COST OF GOODS SOLD.

CAPITALIZED INTEREST is the accrued interest added to the principal balance of a loan while you are not making payments or your payments are insufficient to cover both the principal and interest due. When this occurs, you are paying interest on interest, sometimes called "negative amortization".

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