Marsden Company has three departments occupying the following amount of floor space: Department 1 23,000 sq. ft. Department 2 11,700 sq. ft. Department 3 33,000 sq. ft. How much store rent should be allocated to Department 3 if total rent is equal to $108,000

Question

Business

Malcolm Franco

13 October, 13:56

Marsden Company has three departments occupying the following amount of floor space: Department 1 23,000 sq. ft. Department 2 11,700 sq. ft. Department 3 33,000 sq. ft. How much store rent should be allocated to Department 3 if total rent is equal to $108,000

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Answers (1)

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Robert Sanford · Answer 1

The total rent expense allocated to Department 3 is $52644.02

Explanation:

The rent for the store will be allocated among the three departments based on the floor are used by each department. The total floor are used by all three departments equal,

Total floor area = 23000 + 11700 + 33000 = 67700 sq. ft.

Total rent that would be allocated to Department 3 using the floor are criteria is,

Rent expense-Department 3 = 108000 * 33000/67700

Rent Expense-Department 3 = $52644.017 rounded off to $52644.02