Required Information Problem 22-2A Allocation of bullding occupancy costs to departments LO P2 The following information applies to the questions displayed below National Bank has several departments that occupy both floors of o 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. Depreciation-Buslding Interest Building nortgage Taxes-Building and land Gas (heating) exponse Lighting expense Maintenance expense $31.580 47,250 14,0e 4,375 s,250 9.625 $112,e80 Total occupancy cost The building has 7,000 square feet on each floor. in prior periods, the accounting manoger merely divided the $112,000 occupancy cost by 14,000 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 1,000 square feet, and Juan Chiro manages a second-floor deportment that occupies 1,900 square feet of floor space. In discussing the departmental reports. the second-floor manager questions whether using the seme rate per square foot for ll departments makes sense because the first-fioor 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 $30 per square foot and second-floor space worth $10 per square foot (excluding costs for heating. ighting, and maintenance) Problem 22-2A Part 1 Required: 1. Allocate occupancy costs to the Linder and Chiro departments using the current allocation method. (Round cost answers to 2 decimal places.) Department Linder's Dept Rate square Footage Total Chiro's Dept Required Information Problem 22-2A Allocation of building occupancy costs to departments LO P2 The following information applies to the questions displayed below] Notional 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 $32,see 47,250 Depreciation-Building Interest Building mortgage Taxes-Building and land Gas (heating) expense Lighting expense Maintenance expense 14,0e 4,375 s,250 9.625 $112,000 total eccupancy cost The building has 7.000 square feet on each floor. In prior periods, the accounting manager merely divided the $112.000 occupancy cost by 14.000 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 1,000 square feet, and Juan Chiro manages a second-floor department that occupies 1,900 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-foor 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 $30 per square foot and second-floor space worth $10 per square foot (excluding costs for heating. lighting, and maintenance). Problem 22-2A Part 2 2 Allocate the depreciation, interest, and taxes occupancy costs to the Linder and Chiro departments in proportion to the relative market values of the floor space. Aliocate the heating. lighting. and maintenance costs to the Linder and Chiro departments in proportion to the square feet occupied (ignoring floor space market values) (Round cost answers to 2 decimal places. Round your Intermediate calculations to 2 decimal places.) Department Linder's Department Square Footage Rate Total Chira's Department
