Boston, Inc., planned and actually manufactured 190,000 units of its single product in 2017, its first year of operation. Variable manufacturing cost was $20 per unit produced. Variable operating (nonmanufacturing) cost was $9 per unit sold. Planned and actual fixed manufacturing costs were $950,000. Planned and actual fixed operating (nonmanufacturing) costs totaled $360,000. Boston sold 130,000 units of a product at $40 per unit.
Boston’s 2017 operating income using variable costing is:
a) $1,070,000
b) $420,000
c) $120,000
d) $480,000
e) none of these
Pleasant Hills Properties is developing a golf course subdivision that includes 225 home lots; 100 lots are golf course lots and will sell for $96,000 each; 125 are street frontage lots and will sell for $66,000. The developer acquired the land for $1,810,000 and spent another $1,410,000 on street and utility improvement.
Compute the amount of joint cost to be allocated to the street frontage lots using a value basis.
a. $1,732,360.
b. $1,429,640.
c. $1,785,480.
d. $2,026,480.
e. $1,487,640.
