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.

Question

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The total square footage is 60,000 (10,000 + 20,000 + 30,000). With a total rent expense of $24,000, the cost allocation rate per square foot is $24,000 / 60,000 = $0.40. Department C, occupying 30,000 square feet, would thus be allocated 30,000 * $0.40 = $12,000, not based on a rate of $0.80 per square foot.

Blanton Company Wishes to Allocate Rent Expense of $24,000 to Its