Question

Blanton Company wishes to allocate rent expense of $24,000 to its three operating departments, A, B, and C. Assuming the three departments occupy 10,000, 20,000 and 30,000 square feet respectively, the cost allocation rate for Department C is $0.80 per square foot.
True or False?

Answer 1

Answer:

given statement is false

Explanation:

given data

rent expense = $24,000

operating departments, A = 10,000 square feet

operating departments, B =  20,000 square feet

operating departments, C =  30,000 square feet

cost allocation rate = $0.80 per square foot

solution

rent expense will be here as

rent expense = $\frac{24000}{60000}$

rent expense = $0.40 per square foot

and

rent expense allocated to department C is = 30000 × $0.40

rent expense allocated to department C = $12000

so given statement is false