In which of the following, fixed overheads are not included in the cost of inventory
a) Absorption costing
b) Direct Costing
c) Variable Costing
d) Marginal costing
Correct answer given is d). But my question is, aren't options b), c) and d) synonyms i.e. they mean same.
Direct, Variable and Marginal costing absorbs only the variable costs (or overheads) and leave Fixed costs (or overheads) while Absorption costing involves both fixed and variable costs. So, how can d) be correct??
Please help with this question....my exams are very near.
Thanks.
CAclubindia
