Final answer:
Absorption-costing income, also known as full-costing income, is a method of calculating profit that includes both direct and indirect costs. It provides a more comprehensive calculation of income from all sources of revenue.
Step-by-step explanation:
The meaning of absorption-costing income, also known as full-costing income, is the calculation of profit by including both direct and indirect costs. In absorption costing, all manufacturing costs, including direct materials, direct labor, and both fixed and variable manufacturing overhead costs, are allocated to the units produced. This method allows for a more comprehensive calculation of income from all sources of revenue.
For example, if a company produces bicycles and uses absorption costing, the cost of direct materials such as metal, rubber, and plastic, as well as the cost of direct labor and the manufacturing overhead, such as rent and utilities, would be included in the calculation of the income.