22 q2

S 22-7 Rent expense allocated to departments LO P2 retailer pays $150,000 rent each year for its two-story building. The space in this building is occupled by five departments as pecified here Department Jewelry Cosmetics Housewares Tools Shoes Square feet occupied 1,470 (first-floor) 2,730 (first-floor) 1,886 (second-floor) 840 (second floor) 1,554 (second-floor) The company allocates 70% of total rent expense to the first floor and 30% to the second floor, and then allocates rent expense for each floor to the departments occupying that floor on the basis of space occupled Determine the rent expense to be allocated to each department Step 1: Allocate total rent expense between the two floors, Amount % of Total Allocated Cost First floor % Second floor Totais Step 2: Allocate these portions of total rent expense across the departments occupying each floor First Floor Sq. Feet of Total Cost Jewelry Dept Cosmetics Dept Totais 0 01% 5 0 Second Floor Sq. Feet of Total Cost Housewares Dept Tools Dept Shoes Dept Totais 015 $ 0