Question

1. A company pays $29,000 per period to rent a small building that has 11,400 square feet of space. This cost is allocated to the company's three departments on the basis of the amount of the space occupied by each. Department One occupies 2,280 square feet of floor space, Department Two occupies 3,420 square feet of floor space, and Department Three occupies 5,700 square feet of floor space. If the rent is allocated based on the total square footage of the space, Department One should be charged rent expense for the period of:

Multiple Choice

$8,600.

$5,800.

$4,560.

$2,508.

$2,280.

2. A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $17,000 indicates that Dept. Y had a direct expense of $1,800 for deliveries and Dept. Z had no direct expense. The indirect expenses are $15,200. The analysis also indicates that 50% of regular delivery requests originate in Dept. Y and 50% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are:

Multiple Choice

• $8,500; $8,320.

• $6,800; $10,200.

• $9,400; $7,600.

• $8,500; $10,200.

• $8,500; $8,500.

• 3. The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage.

• 	Purchasing				Maintenance				Fabrication				Assembly
  Operating costs	$	35,000			$	19,800			$	99,000			$	65,000
  No. of purchase orders										16				4
  Sq. ft. of space										3,450				2,550

Compute the amount of Purchasing department expense to be allocated to Assembly

Multiple Choice

• $28,000.

• $15,750.

• $7,000.

• $11,385.

• $8,415.

Answer 1

1.

The correct answer is $5,800.

Supporting Calculations:

Department One = $29,000 * 2,280 square feet / 11,400 square feet

= $5,800

Therefore, Department One should charge with rent expense of $5,800.

Note: As per Chegg guidelines, the first question is answered, hence, please post remaining questions separately.