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A retailer pays $110,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Department
A retailer pays $110,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Department Jewelry Cosmetics Housewares Tools Shoes Square feet occupied 1,640 (first-floor) 2,460 (first-floor) 1,763 (second-floor) 656 (second-floor) 1,681 (second-floor) ok The company allocates 65% of total rent expense to the first floor and 35% to the second floor, and then allocates rent expense for each floor to the departments occupying that floor on the basis of space occupied. t Determine the rent expense to be allocated to each department. ht Cost ences Cost Step 1: Allocate total rent expense between the two floors. Amount % of Total Allocated First floor % Second floor % Totals % Step 2: Allocate these portions of total rent expense across the departments occupying each floor. First Floor Sq. Feet % of Total % Jewelry Dept. % Cosmetics Dept. % Totals Second Floor % of Total % Housewares Dept. % Tools Dept. % Shoes Dept. % Totals Cost Sq. Feet
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