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Manufacturing Income Statement | Accounting homework help

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.


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