A company purchases a 9,900-square-foot building for $420,000. The building has two separate rental units. Unit A, which has the desirable location on the corner and contains 2,025 square feet, will be rented for $2.00 per square foot. Unit B contains 7,875 square feet and will be rented for $1.20 per square foot.

How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation?

A company purchases a 9,900-square-foot building for $420,000. The building has two separate rental units. Unit A, which has the desirable location on the corner and contains 2,025 square feet, will be rented for $2.00 per square foot. Unit B contains 7,875 square feet and will be rented for $1.20 per square foot. How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation? Allocated Rental value Percent of rental value Joint Cost cost Numerator Denominator % of Mkt Value Unit A Unit B Totals