Fact Pattern 14-1

question 66

Multiple Choice

Fact Pattern 14-1
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Meadow, a residential development.
-Refer to Fact Pattern 14-1. If Watershed breaches the contract, Bella's remedy would most likely be

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

---

Definitions:

Inventory

An accounting term referring to the goods and materials held by a business for the purpose of resale or production.

Lot-For-Lot

An ordering system where the exact quantity needed for production is ordered, minimizing inventory holding costs.

EOQ Lot-Sizing

An inventory management technique that determines the optimal order size to minimize the sum of ordering, holding, and stockout costs.

Setup Cost

The expenses incurred to prepare equipment or a production process for manufacturing a new batch of products, including costs for labor, tools, and materials.