A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the total period cost for the month under variable costing?
A)$124,200
B)$123,200
C)$168,200
D)$45,000

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:  What is the total period cost for the month under variable costing?
A)$124,200 
B)$123,200 
C)$168,200 
D)$45,000

Quizplus · Accepted Answer

Under variable costing, the period costs (fixed costs) are expensed in their entirety during the period in which they are incurred, rather than being allocated to the units produced like in absorption costing.

Total period cost = Fixed manufacturing costs + Fixed selling and administrative costs
Total period cost = $120,000 + $48,200
Total period cost = $168,200

Therefore, the correct answer is (C) $168,200.

A Manufacturing Company That Produces a Single Product Has Provided