The telephone expense is allocated to the departments based on floor space occupied. Department A occupies 1,875 square feet and Department B occupies 625 square feet. If the telephone expense is $880, the amount allocated to Department A is:

Question

Quizplus · Accepted Answer

The telephone expense is allocated based on floor space.

So, the total floor space occupied by both departments is:

1,875 sq ft + 625 sq ft = 2,500 sq ft

Now, we need to calculate the proportion of telephone expense allocated to Department A, which occupies 1,875 sq ft:

Proportion of telephone expense for Department A = (Floor space occupied by Department A / Total floor space) x Telephone expense
= (1,875 / 2,500) x $880
= 0.75 x $880
= $660

Therefore, the amount allocated to Department A is $660. Answer: A) $660.

The Telephone Expense Is Allocated to the Departments Based on Floor