Hadlock Company, which has only one product, has provided the following data concerning its most recent month of operations:
-What is the total period cost for the month under the variable costing approach?
A)$125,600
B)$108,800
C)$176,800
D)$68,000

Question

Hadlock Company, which has only one product, has provided the following data concerning its most recent month of operations: 
-What is the total period cost for the month under the variable costing approach?
A)$125,600 
B)$108,800 
C)$176,800 
D)$68,000

Quizplus · Accepted Answer

Under the variable costing approach, total period cost includes only variable manufacturing and non-manufacturing costs.

Variable manufacturing costs: 
Direct materials: $25,000 
Direct labor: $32,000 
Variable manufacturing overhead: $21,600

Total variable manufacturing costs: $78,600

Variable non-manufacturing costs: 
Variable selling and administrative expenses: $98,200

Total variable non-manufacturing costs: $98,200

Total period cost (variable costing) = Total variable manufacturing costs + Total variable non-manufacturing costs 
= $78,600 + $98,200 
= $176,800

Therefore, the correct answer is C.

Hadlock Company, Which Has Only One Product, Has Provided the Following