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 2017,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

To determine the amount of expenses that should be allocated to the home office, we need to calculate what percentage of Peter's residence is used for the office. This is calculated by dividing the square footage of the office by the total square footage of the residence:

250 / 1,500 = 0.1667 (or 16.67%)

This means that 16.67% of Peter's total expenses should be allocated to the home office.

To calculate the amount, we can multiply each expense by 16.67%.

Rent: $12,000 x 0.1667 = $2,000 
Utilities: $4,800 x 0.1667 = $800 
Maintenance expenses: $1,200 x 0.1667 = $200

Adding these amounts together, we get $2,000 + $800 + $200 = $3,000. Therefore, the amount of total expenses that should be allocated to the home office is $3,000.

Peter Operates a Dental Office in His Home