Bobby is an accountant who uses a portion of his home as his office. His home is 2,500 square feet and his office space occupies 1,500 square feet. Rent expense is $18,000 a year; utilities expense is $2,000 a year; and maintenance expense is $3,000 a year. What is the total amount of these expenses that can be allocated to his home office?
A)$5,800
B)$9,200
C)$9,280
D)$13,800
E)$23,000

Question

Quizplus · Accepted Answer

The portion of expenses that can be allocated to Bobby's home office is calculated by taking the percentage of his home that is used for business purposes. In this case, that percentage is 60% (1,500/2,500).

Therefore, the expenses that can be allocated to Bobby's home office are:
Rent expense: $18,000 x 60% = $10,800
Utilities expense: $2,000 x 60% = $1,200
Maintenance expense: $3,000 x 60% = $1,800

Total expenses = $10,800 + $1,200 + $1,800 = $13,800

Bobby Is an Accountant Who Uses a Portion of His