View pe QS 24-7 Rent expense allocated to departments LO P2 A retailer pays $150,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Department Jewelry Cosmetics Housewares Tools Shoes Square feet occupied 1,290 (first-floor) 3,018 (first-floor) 1,720 (second floor) 688 (second-floor) 1,892 (Second-floor) The company allocates 65% of total rent expense to the first floor and 35% to the second floor, and then allocates rent expense for each floor to the departments occupying that floor on the basis of space occupled Determine the rent expense to be allocated to each department Cost Step 1: Allocate total rent expense between the two floors. Amount Allocated % of Total First floor $ 150,000 6596 Second floor 150.000 35/96 Totals 100% $ 97,500 52,500 150 000 $ 6 O 40 search Chp the rent expense to be allocated to each department. Answer is complete but not entirely correct. Step 1: Allocate total rent expense between the two floors. Amount Allocated % of Total Cost First floor 150.000 65 % IS 97,500 Second floor 150,000 35 % 52,500 Totals 100 % 150,000 Step 2: Allocate these portions of total rent expense across the departments occupying each floor. First Floor Sq. Feet % of Total Cost Jewelry Dept 1,290 25 X % IS 34,125% Cosmetics Dept. 3,010 75 % 63,375 Totals 4,300 100 % 97,500 Second Floor Sq. Feet % of Total Cost Housewares Dept. 1.720 41% % 21,525 % Tools Dept. 688 19 % % 9,975 Shoes Dept 1,892 40 % 21,000 X Totals 4,300 100 % S. 52,500