Harbor Corp currently leases a corporate suite in an office building for a cost of $ 260,000 a year. Only 88 % of the corporate suite is currently being used. A startminus up business has proposed a plan that would use the other 12 % of the suite and increase the overall costs of maintaining the space by $ 25,659.

a. If the standminus alone method were used, what amount of cost would be allocated to the startminus up business?

Question

Business

Amira Zhang

6 October, 22:10

Harbor Corp currently leases a corporate suite in an office building for a cost of $ 260,000 a year. Only 88 % of the corporate suite is currently being used. A startminus up business has proposed a plan that would use the other 12 % of the suite and increase the overall costs of maintaining the space by $ 25,659.

a. If the standminus alone method were used, what amount of cost would be allocated to the startminus up business?

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Case Hardin · Answer 1

The correct answer to allocate the amount of cost would be allocated to the startminus up business is $56859

Lease rent allocated to startminus up business = $260000 * 12% = $31200

Allocation of overall costs of maintaining the space = $25659

Amount of cost allocated to the startminus up business = $31200 + $25659 = $56859