Pleasant Hills Properties is developing a golf course subdivision that includes 250 home lots; 100 lots are golf course lots and will sell for $95,000 each; 150 are street frontage lots and will sell for $65,000. The developer acquired the land for $1,800,000 and spent another $1,400,000 on street and utilities improvement. Compute the amount of joint cost to be allocated to the golf course lots using value basis. (Round your intermediate percentages to 2 decimal places.)
A) $1,920,000.
B) $720,000.
C) $1,620,800.
D) $1,579,200.
E) $1,080,000.
D) $1,579,200.
Explanation: Total cost of the land = $1,800,000 + $1,400,000 = $3,200,000
($95,000 * 100 = $9,500,000) + ($65,000 * 150 = $9,750,000) = $19,250,000 total sales
$9,500,000/$19,250,000 = 49.35%; 49.35% * $3,200,000 = $1,579,200
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