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Dail and Associates has three departments: advertising, sales, and information systems. The departments occupy a 2,000 square feet, 1,000 square feet, and 1,000 square feet of office space, respectively (in that order). The company pays $5,000 per month to rent offices.
Question 1: How much monthly rent cost should Dail and Associates allocate to the information systems department? ___________
Hint: determine the rate per square foot and then calculate the allocation per the IS department.
The activity is the monthly rent and the cost driver is the total office space.
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