The amount of the cost will be allocated to department is $6,900
<h3>What are operating costs?</h3>
Operating costs are known to be the current or the present expenses that are often incurred from the daily running of a business. They includes selling, administrative expenses, etc.
Note that in the above, the Total rental cost allocation to department 1 are:
= (100 x $25) + (200 x $22)
So you then sum up the both amount together:
= $2,500 + $4,400 = $6,900
Therefore, the cost that needs to be allocated to Department 1 is $6,900
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