Rent Expense on the Factory Building of $100,000 Is Allocated

question 109

Short Answer

Rent Expense on the Factory Building of $100,000 is allocated to three departments.The cost-allocation base for this expense is number of square feet,which equals 50,000 square feet.Information for the three departments housed in the factory building are as follows:
$\begin{array}{lll} \text {Department }& \text { Square Feet}& \text { Cubic Feet}\\\text { Department A } & 15,000 & 15,000 \\\text { Department B } & 5,000 & 5,000 \\\text { Department C } & 30,000 & 20,000 \\\end{array}$
How much Rent Expense is allocated to the three departments?
$\begin{array}{lll}&\text { Department A }&\text { Department B }&\text { Department C }\\A)&\$ 15,000 & \$ 5,000 & \$ 30,000 \\B)&\$ 37,500 & \$ 12,500 & \$ 50,000 \\C)&\$ 30,000 & \$ 10,000 & \$ 60,000\end{array}$
D) none of the above

• A)&\$ 15,000 & \$ 5,000 & \$ 30,000 \\
• B)&\$ 37,500 & \$ 12,500 & \$ 50,000 \\
• C)&\$ 30,000 & \$ 10,000 & \$ 60,000
• \end{array}\)
• D) none of the above

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Definitions:

Heritage Products

Goods that are made with traditional methods, often with a long history associated with a particular culture, community, or family.

Environmental Force

External factors that affect an organization’s performance, including socio-cultural, technological, economic, environmental, and political-legal influences.

Administrative

Pertains to the activities related to the management and execution of the policies and operations of an organization, ensuring smooth and efficient processes.

Technological

Relating to or involving technology, especially in regard to its development, usage, and impact on society.