Tidy Home Properties is developing a subdivision that includes 300 home lots. The 225 lots in the
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Tidy Home Properties is developing a subdivision that includes 300 home lots. The 225 lots in the Garden section are below a ridge and do not have views of the neighboring gardens and hills; the 75 lots in the Premier section offer unobstructed views. The expected selling price for each Garden lot is $50,000 and for each Premier lot is $100,000. The developer acquired the land for $2,500,000 and spent another $2,000,000 on street and utilities improvements. Assign the joint land and improvement costs to the lots using the value basis of allocation and determine the average cost per lot.
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Preliminary calculations Land cost 2500000 Improvements 2000000 Total cost of lots ...View the full answer
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