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.
DEFINITION of 'Gross Income'. 1. An individual's total personal income before taking taxes or deductions into account. 2. A company's revenue minus cost of goods sold.Also called  gross margin  and gross profit..REAKING DOWN 'Gross Income'. 1. Your gross income is how much you make before taxes. It is the figure people are looking for when they ask how much you gross a month. 2. This is an important number when analyzing a company, it indicates how efficiently management uses labor and supplies in the production process.