a newconnect.mheducation.com dent Apply to bec Required Int. Work with W Connect er 09 Homework Help Save & Exit Submit Check my work Required information The following information applies to the questions displayed below. of 2 National Bank has several departments that occupy both floors of a two-story building. The departm 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. Depreciation-Building Interest-Building mortgage Taxes-Building and land Gas (heating) expense Lighting expense Maintenance expense Total occupancy cost $18,000 27,000 9,000 3,000 3,000 6, 000 $ 66,000 ok nt The building has 4,000 square feet on each floor. In prior periods, the accounting manager merely divided the $66,000 occupancy cost by 8,000 square feet to find an average cost of $8.25 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupied. manages a first-floor department that occupies 1,000 square feet, and Juan Chiro manages a second- floor department that occupies 1,800 square feet of floor space. In discussing the departmental reports, the second- first-floor foot (excluding costs for heating, lighting, and maintenance). floor man for similar space that shows first-floor space worth $30 per square foot and second-floor space worth $20 per square ager questions whether using the same rate per square foot for all departments makes sense because the space is more valuable. This manager also references a recent real estate study of average local rental costs ??linratether4onrariatinn intareet and avos nepunanev coste to the I inder and Chin denartmente in nnnnrtinn to the relatihse nan
Answer:-
Depreciation Building = $ 18000
Interest Building Mortgage = $ 27000
Taxes Building & Land = $ 9000
Total Cost = $54,000
To be Apportioned on the basis of Market Value of the Floor.
Market Value of 1st Floor = $30*4000 square Feet = $120,000
Market Value of 2nd Floor = $20*4000 Square Feet = $80,000
Total Value = $ 200,000
Approtioned COst For the 1St floor = ( $54000/ $ 200000)* $120,000 = $32,400
Approtioned COst For the 2nd floor = ( $54000/ $ 200000)* $80,000 = $ 21,600
Rate Per Square Feet :-
1st Floor have 4000 Square Feet = $32400/4000 = $8.1
2nd Floor have 4000 Square Feet = $21600/4000 = $5.4
2.Other costs to be apportioned on the basis of Square foot
Gas Expenses = $ 3,000
Lightning Expenses = $3,000
Maintenance Expense = $ 6,000
Total Costs = $ 12,000
Total Area Occuied by 1st floor 4,000 Square feet
Total Area Occuied by 2nd floor 4,000 Square feet
in total 8,000
Average rate per Square feet = $ 12,000/ 8000 = $ 1.5 per Square Feet.
Requirment:
| Department | Square Footage | Rate | Total ($) |
| Linder\'s Dept | 1,000 | (8.10+1.50) = 9.60 | 9,600 |
| Chiro\'s Dept | 1,800 | (5.40+1.50) = 6.90 | 12,420 |
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