Bank's Department Store has three departments: Men's,Women's and Children's.The store incurred $50,000 of store rental costs during the current year.The departments identified the following cost drivers: $\begin{array}{|l|r|r|r|}
\hline & \text { Men's } & \text { Women's } & \text { Children's } \
\hline \text { Labor dollars } & \$ 530,000 & \$ 775,000 & \$ 240,000 \
\hline \text { Number of employees } & 10 & 20 & 4 \
\hline \text { Square footage } & 3,000 & 8,000 & 1,000 \
\hline \text { Number of sales transactions } & 300,000 & 900,000 & 90,000 \
\hline
\end{array}$ Using the most appropriate cost driver,how much rental cost (rounded to the nearest dollar)should be allocated to the Women's Department? (Do not round your intermediate calculations. )
A) $33,333
B) $29,412
C) $25,081
D) $34,884

Question

Quizplus · Accepted Answer

The most appropriate cost driver for rental costs is square footage. The Women's Department occupies 8,000 out of a total 12,000 square feet (3,000 + 8,000 + 1,000). Therefore, the rental cost allocated to the Women's Department is $ \frac{8,000}{12,000} \times 50,000 = 33,333 $.

Bank's Department Store Has Three Departments: Men's,Women's and Children's Using the Most Appropriate Cost Driver,how Much Rental Cost (Rounded