Answer (B) is correct . Under variable costing, the only costs that are capitalized are the variable costs of manufacturing. These include Direct materials used $300,000 Direct labor 100,000 Variable manufacturing overhead 50,000 Total inventoriable costs $450,000
Answer (A) is incorrect because The amount of $400,000 does not include $50,000 of variable manufacturing overhead.
Answer (C) is incorrect because The $40,000 of variable selling and administrative costs should not be included in the inventoriable costs.
Answer (D) is incorrect because The amount of $530,000 is the inventoriable cost under absorption (full) costing.
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If Fortech Company uses variable costing, the inventoriable costs for the fiscal year are
