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QS 22-8 Rent expense allocated to departments LO P2 A retailer pays $190,000 rent each year for its two-story building. The space in this building
QS 22-8 Rent expense allocated to departments LO P2 A retailer pays $190,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Jewelry department 1,800 square feet of first-floor space Cosmetics department 2,700 square feet of first floor space Housewares department 1,890 square feet of second-loor space Tools department 765 square feet of second-loor space Shoes department 1,845 square feet of second-floor space The company allocates 60% of total rent expense to the first floor and 40% to the second floor, and then allocates rent expense for each floor to the departments occupying that floor on the basis of space occupied. Determine the rent expense to be allocated to each department. Amount Allocated | $ 190,000 190,000 $ $ First floor Second floor Totals First Floor Jewelry Dept. Cosmetics Dept. Totals Second Floor Housewares Dept. Tools Dept. Shoes Dept. Totals % of Total 60% 40% 100% % of Total 40% 60% 100% % of Total Sq. Feet 1,800 2,700 4,500 Sq. Feet 1.890 $ Cost 114,000 76,000 190,000 Cost 720 1,080 1,800 Cost $ 765 1,845 4.500
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