Absorption/direct costing

reza31 · #1 Aug 2, 2006, 05:00 PM

Which of the following is a true statement regarding absorption and/or direct costing?
A) A firm can choose to use either absorption or direct costing for income tax purposes.
B) A firm can choose to use either absorption or direct costing for financial reporting purposes.
C) Direct costing assigns only direct materials and direct labor to products.
D) Absorption costing includes fixed overhead in product costs whereas direct costing does not.
E) None of the above.

Jennifer Nicole · Aug 19, 2006, 04:50 PM

Answer D



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