Solution-How much of the monthly rental expense should be

How much of the monthly rental expense should be allocated

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Reference no: EM132528023

A company rents a building with a total of 50,000 square feet, which are evenly divided between two floors. The company allocates the rent for space on the first floor at twice the rate of space on the second ?oor. The total monthly rent for the building is $30,000.

Question 1: How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the first ?oor?

A) $8,000. ($30,000x2/3)/25000 = $0.8013q ft

B) $5,000. $0.80 x 10,000 sq ft = $8,000

C) $3,000. 1St floor portion on rent = 28 since it rents at twice the

D) $4,000. rate as the 2nd floor

E) $2,000.

Reference no: EM132528023

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How much of the monthly rental expense should be allocated

Reference no: EM132528023

Reference no: EM132528023

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