i? newconect.mteducation.com HP 22 6 Seved Help Save& Exit Submit Check my work

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i? newconect.mteducation.com HP 22 6 Seved Help Save& Exit Submit Check my work 3 0 Required information Part 1 of 2 (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. 3.75 points Depreciation-Building Interest-Duiiding mortgage Taxen-Building and land Gas (heating) expense Lighting expense Haintenance expense Total oooupancy comt 31,50 eBook 47,250 14,000 4,375 ,250 Print 112,000 The building has 7000 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 occupled Diane Linder manages a first-floor department that occupies 1,100 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- 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

Explanation / Answer

a) Department Square Footage Rate Total = Square Footage x Rate Linder’s Dept. 1100 $8.00 $8,800.00 Chiro's Dept. 1900 $8.00 $15,200.00

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