Which if the following is a rue statement regarding absorption and/or direct costing?
a) a firm can chose to use either absorption or direct costing for income tax purposes
b) a firm can chose 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

The answer is d

PLEASE stop giving away the answers to people's homework! Not only are you doing THEIR work for them, but an answer with no explanation doesn't teach anyone anything.

Well excuse me morgaine. I'm only trying to help, but forget it all. I'm new to this site. I don't exactly know how to go about answering questions for people. I didn't think it mattered. But thanks for teaching me.