Fact Pattern 12-1

question 72

Multiple Choice

Fact Pattern 12-1
Estelle enters into a contract to buy 132 acres from Desmond to subdivide and sell in quarter-acre lots for Country Acres, a residential development.
-Refer to Fact Pattern 12-1.If Estelle breaches the contract,Desmond's remedy would most likely be

• A)a certain ratio of the amount that Estelle has in liquid funds.
• B)a percentage of Estelle's unrealized profit.
• C)the difference between the land's contract and market prices.
• D)specific performance.

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Definitions:

Process Costing System

A process costing system is an accounting method used to allocate costs to units of product in continuous or repetitive processes, suitable for industries producing homogeneous products.

Conversion Costs

Conversion costs are manufacturing expenses incurred in converting raw materials into finished products, including direct labor and manufacturing overhead.

First-In, First-Out

An inventory valuation method where the oldest inventory items are recorded as sold first.

Process Costing System

A method used in accounting and management to assign production costs to units of output, typically used for processes that produce large quantities of similar items.