Question

Marsden Company has three departments occupying the following amount of floor space:

a)Department 1 18,000 sq. ft.
b)Department 2 10,300 sq. ft.
c)Department 3 28,000 sq. ft.
How much store rent should be allocated to Department 3 if total rent is equal to $96,000? (Round intermediate calculations to 1 decimal place.)

Answer 1

To allocate the store rent to Department 3, we calculate the proportion of its floor space to the total floor space occupied by all departments and multiply it by the total rent.

Step-by-step explanation:

To calculate the store rent to be allocated to Department 3, we need to find the proportion of floor space it occupies compared to the total floor space occupied by all departments. First, we find the total floor space occupied by all departments by adding the floor space of each department: 18,000 + 10,300 + 28,000 = 56,300 sq. ft.

Then, we find the proportion of Department 3's floor space by dividing its floor space by the total floor space: 28,000 / 56,300 = 0.4976. Finally, we calculate the store rent to be allocated to Department 3 by multiplying the proportion by the total rent: 0.4976 * $96,000 = $47,782.4. Therefore, the store rent to be allocated to Department 3 is $47,782.4.