Absorption costing is a cost accounting method for valuing inventory. Absorption costing includes or absorbs all the costs of manufacturing a product including both fixed and variable costs.That means that all costs including direct, like material costs, and indirect, like overhead costs, are included in the price of inventory.bsorption costing includes or absorbs all the costs of manufacturing a product including both fixed and variable costs. That means that all costs including direct, like material costs, and indirect, like overhead costs, are included in the price of inventory.
Definition. Total amount of income earned annually. Gross annual income represents the amount of money a person earns in one year from all sources before taxes. When preparing an income tax return, the gross annual income figure is the base figure with which to start.
Note that the gross profit is the percentage of the adjusted revenue to cover taxes and a net profit of 9%. Tax is 23% of gross. Therefore gross = (.23g + .09); therefore .77g = .09; then g=.09/.77 = .1169 or Gross Profit (sometimes referred to as Ordinary Income) = 11.69% of adjusted revenue.