Peter operates a dental office in his home. The office occupies 250 square feet of his residence, which is a total of 1,500 square feet. During 2016, Peter pays rent for his home of $12,000, utilities of $4,800, and maintenance expenses of $1,200. What amount of the total expenses should be allocated to the home office?

Question

Quizplus · Accepted Answer

The home office occupies 250/1500 = 1/6 of the total residence. Therefore, 1/6 of the total expenses should be allocated to the home office. Total expenses are $12,000 (rent) + $4,800 (utilities) + $1,200 (maintenance) = $18,000. Allocating 1/6 of $18,000 gives $3,000.

Peter Operates a Dental Office in His Home