a company pays $32,000 per period to rent a small building that has 11,700 square feet of space. this cost is allocated to the company's three departments on the basis of the amount of the space occupied by each. department one occupies 2,340 square feet of floor space, department two occupies 3,510 square feet of floor space, and department three occupies 5,850 square feet of floor space. if the rent is allocated based on the total square footage of the space, department one should be charged rent expense for the period of:

Respuesta :

If the rent is allocated based on the total square footage of the space, department one should be charged rent expense for the period of $6388.

We must ascertain the small building's cost per square foot in order to determine the department's assigned costs.

Rent per square foot costs are calculated as follows: Total rent expense / Total Square Feet of Space = $32,000 / 11700.

The cost of rent per square foot equals $2.73. The department's square footage must now be known in order to calculate the rent expense for Department 1. 

Rent costs of Department 1 = Square feet of Department 1 x Per Square feet cost.

Rent Expense of Department 1 = 2340 Sq.ft x $ 2.73.

Rent expense of Department 1 = $6388.

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