A company rents a building with a total of 100,000 square feet, which are evenly divided between two floors. The space on the first floor is considered twice as valuable as that on the second floor. The total monthly rent for the building is $30,000. How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the first floor?
A) $6,000.
B) $5,000.
C) $3,000.
D) $4,000.
E) $2,000.

Question

Quizplus · Accepted Answer

Since the total square footage is 100,000, the first floor and the second floor each have 50,000 square feet. Let x be the amount of the monthly rental expense to be allocated to each square footage on the second floor. Then, the amount allocated to each square footage on the first floor would be 2x. Hence, we have:

50,000(x) + 50,000(2x) = 30,000
150,000x = 30,000
x = 0.2

Therefore, the amount allocated to each square footage on the second floor is $0.2, and the amount allocated to each square footage on the first floor is $0.4. Therefore, the monthly rental expense for the 10,000 square feet on the first floor is:

10,000($0.4) = $4,000

Thus, the answer is D, $4,000.

A Company Rents a Building with a Total of 100,000