# ALLOCATING OPERATING EXPENSE—SQUARE FEET Weaverling Company rents 10,000 square feet of store space for $36,000 per year. The amount of square footage by department is as follows: Allocate the annual rent expense among the four departments on the basis of relative square feet of floor space occupied. BuyFindarrow_forward ### College Accounting, Chapters 1-27 23rd Edition HEINTZ + 1 other Publisher: Cengage Learning, ISBN: 9781337794756 #### Solutions Chapter Section BuyFindarrow_forward ### College Accounting, Chapters 1-27 23rd Edition HEINTZ + 1 other Publisher: Cengage Learning, ISBN: 9781337794756 Chapter 25, Problem 2SEA Textbook Problem 1 views ## ALLOCATING OPERATING EXPENSE—SQUARE FEET Weaverling Company rents 10,000 square feet of store space for$36,000 per year. The amount of square footage by department is as follows:Allocate the annual rent expense among the four departments on the basis of relative square feet of floor space occupied.

To determine

Compute the amount of annual rent expense allocated to each of the four departments, based on square feet of floor space used.

### Explanation of Solution

Indirect expenses: The expenses that are not directly related to the operations of one department alone, or related to joint or associated departments, are referred to as indirect expenses.

Compute the amount of annual rent expense allocated to each of the four departments, based on square feet of floor space used.

 Department Square Feet Percentage of Total Square Feet × Annual Rent Expense = Allocated Cost Department A 2,600 2,600/10,000=26% × $36,000 =$9,360 Department B 2,400

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