A retailer pays $190,000 rent each year for its two-story building. The space in

Question

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.

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.
  

Jewelry department 1,470 square feet of first-floor space Cosmetics department 3,430 square feet of first-floor space Housewares department 2,058 square feet of second-floor space Tools department 980 square feet of second-floor space Shoes department 1,862 square feet of second-floor space

Explanation / Answer

Amount Allocated % of Total Cost First Floor    190,000.00 60%    114,000.00 Second Floor    190,000.00 40%      76,000.00 Total 100%    190,000.00 First Floor Square Feet % of Total Cost Jewelry Department        1,470.00 30%      34,200.00 Cosmetics Department        3,430.00 70%      79,800.00 Total        4,900.00 100%    114,000.00 Second Floor Square Feet % of Total Cost Housewares Department        2,058.00 42%      31,920.00 Tools Department            980.00 20%      15,200.00 Shoes Department        1,862.00 38%      28,880.00 Total        4,900.00 100%      76,000.00

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