Required information 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. Depreciation-Building Interest-Building mortgage Taxes Building and land Gas (heating) expense Lighting expense Maintenance expense Total occupancy cost $13,500 20, 250 6.000 1.875 2,250 4, 125 $ 48,000 The building has 3,000 square feet on each floor. In prior periods, the accounting manager merely divided the $48.000 occupancy cost by 6,000 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 1,800 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 $20 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.) interest- B oing mortgage Taxes-Building and land Gas (heating) expense Lighting expense Maintenance expense Total occupancy cost 20.250 6,000 1,875 2,250 4, 125 $48.ece The building has 3,000 square feet on each floor. In prior periods, the accounting manager merely divided the $48,000 occupancy cost by 6,000 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 1000 square feet, and Juan Chiro manages a second floor department that occupies 1800 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 $20 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.) Rate Total Department Square Footage Linder's Dept. Chino's Dept. Next >
