Answer:
<em>Net income 29503</em>
<em></em>
Explanation:
First we need to allocate the land and improvement cost over the lots, we are going to do so based on the revenue:
groups NºLot $ per Lot Revenue Cost per Group Per lot
A 9 7200 64,800 44,937.4648 4,993.0516
B 15 9600 144,000 99,861.0329 6657.4022
C 17 5760 97,920 67,905.5023 3,994.4413
Total Revenue 306720
We divide the group revenue over the total revenue and multiply by the land
and land improvements
Then we take the allocation per group and divde over the total number of lot
<u>We do the same with the allocate expenses:</u>
groups NºLot $ per Lot Revenue Cost per Group Per lot
A 9 7200 64800 9228.169 1025.3521
B 15 9600 144000 20507.0423 1367.1362
C 17 5760 97920 13944.7887 820.2817
Total revenue 306720
Next we solve for the sol lots:
A 9 lots less 5 unsold = 4
B 15 lots less 7 unsold = 8
C 17 lots less 2 unsold = 15
And we proceeds to do the income statement
Revenue sold x market price
Group A 4 28800
Group B 8 76800
Group C 15 86400
192000
Cost lot sold x (allocate operating + allocate land and improvements)
group A 24073.6148
group B 48147.2296
group C 90276.0555
Total expenses 162496.8999
<em>Net income 29503</em>
