7.4k views
1 vote
The Company has 2 offices.

Office 1 has a monthly rent costs of €1,000. The annual figures are compiled at the 15th of January. On January 11 a credit note is received for €500 for previous year, because of the good relation.

On the 31st of December invoice is received and paid for rent for January for €1,000.

Office 2 has one year contract, with the first 2 months rent free period. Monthly rent payment is €1,200.

What is the actual rent expense per month?

User Jimmy Lin
by
8.3k points

1 Answer

5 votes

Final answer:

To calculate the actual rent expense per month for two offices with an annual rent of $85,000, divide the total by 12, resulting in a monthly rent expense of $7,083.33.

Step-by-step explanation:

To calculate the actual monthly rent expense for a company with two offices, the rental costs of both offices need to be aggregated. According to the provided data, the first office has an annual rental cost of $50,000, and the second office incurs an annual cost of $35,000. Combining these figures gives a total yearly office rental expense of $85,000.

To find the monthly rent expense, the total yearly cost is divided by 12 (the number of months in a year):

\[ \frac{\$85,000}{12} \approx \$7,083.33 \]

This calculation yields approximately $7,083.33, representing the combined monthly rental costs for the two offices.

This figure signifies the baseline monthly expenditure associated with office space before factoring in other financial elements such as revenues or additional expenses. It provides a clear insight into the fixed overhead costs related to maintaining the company's physical workspace. Understanding these costs is crucial for budgeting purposes, enabling the company to plan and allocate resources effectively. The actual monthly rent expense serves as a fundamental component in the overall financial management and planning for the company's operational costs.

User Hung Tran
by
8.1k points