Question
Braun Company has one service department and two operating (production) departments. Maintenance Department costs are allocated to the two operating departments based on square feet
Braun Company has one service department and two operating (production) departments. Maintenance Department costs are allocated to the two operating departments based on square feet occupied. Listed below are the operating data for the current period:
DepartmentDirect ExpensesSquare FeetMaintenance$ 40,50015,000Milling86,50030,000Assembly115,40045,000The total cost of operating the Assembly Department for the current period is:
a. $110,800.
b. $125,600.
c. $155,900.
d. $115,400.
e. $139,700.
A company rents a building with a total of 50,000 square feet, which are evenly divided between two floors. The total monthly rent for the building is $30,000. The company allocates $20,000 of total rent expense to the first floor and $10,000 of total rent expense to the second floor. How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the first floor?
a. $3,000.
b. $8,000.
c. $5,000.
d. $2,000.
e. $4,000.
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