Question6 10 points Answer the following question with the data contained in Tab

Question

Question6 10 points Answer the following question with the data contained in Table 1 below. Table 1. Profit Centes Analysis Retrofit 10,000,000 Cost of Construction 600 4,000,000 200,000 2,620,000 200,000 Tetal Direct Cost 9,000,000 350,000 500 Operating Expenses Auto and Truck 60,000 237,000 00,000 ance (Work-in Interest Work Other Varable Expense Contributions Tetal Variable 5,000 3,000 20,000 ation (Auto and Depreciation e (Auto and T nd Truck) 44,000 etal Fixed Operating Tetal Operating Expense 453,000 Net Profit Based on square feet of space to operate each profit center (30,000 SF for New Construction, 10,000 SF for Remodel, and 10,000 SF for Industrial Retrofit), what amount of Rent should be allocated to the profit center of Industrial Retroft? O 8,800 O 22.000 O 17,600 O 26,400

Explanation / Answer

Step 1: Calculate Rent Per Square Feet:

Rent Per square Feet = (44000/50000) = $0.88 per square feet.

Step 2: Calculation of rent Allocated to Industrial retrofit

Total Square foot space for Industrial retrofit to operate = 10000 sq. feet.

Therefore, Amount of rent allocated to Industrial retrofit = (0.88 X 10000) = $8800 (option 1)

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