Check my work 1 [The following information applies to the questions displayed below.) National Bank has several departments that occupy both floors of a two-story building. The departmental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and amounts of occupancy costs recorded in this account for the current period follow. Part 1 of 2 5 points Depreciation-Building Interest-Building mortgage Taxes-Building and land Gas (heating) expense Lighting expense Maintenance expense Total occupancy cost $ 27,000 40,500 12,000 3,750 4,500 8,250 $ 96,000 eBook Print References The building has 6,000 square feet on each floor. In prior periods, the accounting manager merely divided the $96,000 occupancy cost by 12,000 square feet to find an average cost of $8 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupied. Diane Linder manages a first-floor department that occupies 900 square feet, and Juan Chiro manages a second- floor department that occupies 1,800 square feet of floor space. In discussing the departmental reports, the second- floor manager questions whether using the same rate per square foot for all departments makes sense because the first-floor space is more valuable. This manager also references a recent real estate study of average local rental costs for similar space that shows first-floor space worth $40 per square foot and second-floor space worth $10 per square foot (excluding costs for heating, lighting, and maintenance). Required: 1. Allocate occupancy costs to the Linder and Chiro departments using the current allocation method. (Round cost answers to 2 decimal places.) ch9 STEP 5 Homework Saved Help Save & Exit Submit Check my work 1 1 Llyniny expense Maintenance expense Total occupancy cost 43UU 8,250 $ 96,000 Part 1 of 2 The building has 6,000 square feet on each floor. In prior periods, the accounting manager merely divided the $96,000 occupancy cost by 12,000 square feet to find an average cost of $8 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupied. 5 points Diane Linder manages a first-floor department that occupies 900 square feet, and Juan Chiro manages a second- floor department that occupies 1,800 square feet of floor space. In discussing the departmental reports, the second- floor manager questions whether using the same rate per square foot for all departments makes sense because the first-floor space is more valuable. This manager also references a recent real estate study of average local rental costs for similar space that shows first-floor space worth $40 per square foot and second-floor space worth $10 per square foot (excluding costs for heating, lighting, and maintenance). eBook Print References Required: 1. Allocate occupancy costs to the Linder and Chiro departments using the current allocation method. (Round cost answers to 2 decimal places.) Square Footage Rate Total Department Linder's Dept. $ 8.00 $ 0 Chiro's Dept. 8.00 $ 0
