A retailer pays $170,000 rent each year for its two-story building. Space in this building is occupied by five departments as shownhere.DepartmentJewelryCosmeticsDepartmentHousewaresToolsShoesSquare feet occupied1,410 (first-floor)3,290 (first-floor)Square feet occupied2,115 (second-floor)893 (second-floor)1,692 (second-floor)The company allocates $110,500 of total rent expense to the first floor and $59,500 to the second floor. It then allocates rent expensefor each floor to the departments on that floor based on square feet occupied.Determine the rent expense to be allocated to each department.First FloorJewelry DepartmentSquare FeetPercent of TotalCost Allocated%Cosmetics Department%Totals00%$0Second FloorSquare FeetPercent of TotalCost AllocatedHousewares Department%Tools Department%Shoes Department%Totals00%$0

Cost allocation is the process of allocation of cost to different cost objects. This is used to…

A retailer pays $170,000 rent each year for its two-story building. Space in this building is occupied by five departments as shown here. Department Jewelry Cosmetics Department Housewares Tools Shoes Square feet occupied 1,410 (first-floor) 3,290 (first-floor) Square feet occupied 2,115 (second-floor) 893 (second-floor) 1,692 (second-floor)

A retailer pays $170,000 rent each year for its two-story building. Space in this building is occupied by five departments as shown here. Department Jewelry Cosmetics Department Housewares Tools Shoes Square feet occupied 1,410 (first-floor) 3,290 (first-floor) Square feet occupied 2,115 (second-floor) 893 (second-floor) 1,692 (second-floor)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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A retailer pays $130,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here.
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[The following information applies to the questions displayed below.] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent $ 45,000 Advertising 25,000 Insurance 10,000 Total $ 80,000 The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Department Square Feet Sales Value of Insured Assets Housewares 1,840 $ 270,000 $ 49,000 Sporting 2,160 230,000 Total 4,000 $ 500,000 $100,000 2. Allocate indirect expenses to the two departments. Rent expense is allocated based on square feet occupied. Advertising expense is allocated based on total sales. Insurance expense is allocated based on the value of insured…