The costing method that has been labelled as a "black hole" because fixed costs are inventoried is commonly known as

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Absorption costing has been labelled a "black hole" because fixed costs, such as rent and utilities, are inventoried as part of the cost of each unit produced. This can lead to overstatement of profits when there is a buildup of inventory or production levels decline. Direct costing, on the other hand, only includes variable costs in the cost of each unit produced, making it less prone to distortion during periods of fluctuating production levels. Break-even point costing and standard costing are not generally associated with the problem of fixed costs being inventoried. Variable costing is similar to direct costing but uses a slightly different approach to calculating costs.

The Costing Method That Has Been Labelled as a "Black