NV280EC ×?Q Macro 1.3 FlashcardsIC ×VS Google ogle?vahOO.login @ MyMathlablpears

Question

NV280EC ×?Q Macro 1.3 FlashcardsIC ×VS Google ogle?vahOO.login @ MyMathlablpearsc?YeuTube 0, Trplex syndrome. .. Common phrases p a Lie Soence Scent C -Po. ework Saved Help Save (The following information applies to the questions displayed below National Bank has several departments that occupy both floors of a two-story building. The departmental accounting 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-Buiiding and land 6as (heating) expense Lighting expense Maintenance expense s 27,0e0 40,580 12,099 3,750 4,589 Total occupancy cost 5 96,000 The building has 6,000 square feet on each floor. In prior periods, the accounting manager merely divided the $96.000 occupancy cost by 12,000 square feet to find an average cost of $8 per square foot building occupancy cost equal to this rate times the number of and then charged each department a square feet that it occupied. Diane Linder manages a first-floor department that occupies 900 square feet, and Juan Chiro manages a second-floor department that occupies 1,800 square feet of floor space. In discus manager questions whether using the same rate per square foot for all departments makes sense because space is more valuable. This manager space that shows first-floor space worth sing the departmental reports, the second-floor the first-floor also references a recent real estate study of average local rental costs for simlar foot and second-floor space worth $10 per square foot (excluding $40 per square costs for heating, lighting, and maintenance) earch Ins

Explanation / Answer

Answer 2. Total Costs Value Based Costs Usage-Based Costs Depreciation—Building                   27,000.00                      27,000.00 Interest—Building mortgage                   40,500.00                      40,500.00 Taxes—Building and land                   12,000.00                      12,000.00 Gas (heating) expense                     3,750.00                      3,750.00 Lighting expense                     4,500.00                      4,500.00 Maintenance expense                     8,250.00                      8,250.00 Total                   96,000.00                      79,500.00                    16,500.00 Value based costs are allocated to department in two steps: Compute Market Value of each floor: Square Footage Value Per Sq. Ft. Total First Floor                     6,000.00                              40.00                  240,000.00 Second Floor                     6,000.00                              10.00                    60,000.00 Total Market Value                   12,000.00                  300,000.00 Allocate $79,500 to each floor based on its percent of market value: Market Value % of Total Allocated Costs Cost per Sq. Ft. First Floor                240,000.00 80%                    63,600.00                         10.60 Second Floor                   60,000.00 20%                    15,900.00                           2.65 Total                300,000.00                    79,500.00 Usage Based Allocation Rate = $16,500 / 12,000 Sq feet = $1.375 per sq. feet or $1.38 per sq ft (Approx.) Compute total allocation rates for floors: Value Usage Total First Floor                           10.60                                1.38                            11.98 Second Floor                             2.65                                1.38                               4.03 Allocate occupancy Costs to departments Department Space occupied Rate Occupancy Cost Linder                         900.00                              11.98                    10,782.00 Chiro                     1,800.00                                4.03                      7,254.00

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.