Absorption costing

Absorption costing is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs.

Definitions

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Absorption costing. Method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs.

According to Managerial Accounting by Braun, Tietz (5th edition),

Absorption costing. The costing method where products "absorb" both fixed and variable manufacturing costs.