A company rents a building with a total of 50,000 square feet, which are evenly divided between two floors. The company allocates the rent for space on the first floor at twice the rate of space on the second floor. The total monthly rent for the building is $30,000.
-How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the second floor?
A) $4,000.
B) $3,000.
C) $5,000.
D) $2,000.
E) $8,000.

Question

A company rents a building with a total of 50,000 square feet, which are evenly divided between two floors. The company allocates the rent for space on the first floor at twice the rate of space on the second floor. The total monthly rent for the building is $30,000. 
-How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the second floor?
A) $4,000.
B) $3,000.
C) $5,000.
D) $2,000.
E) $8,000.

Quizplus · Accepted Answer

The first floor has 25,000 square feet and the second floor has 25,000 square feet. The rent for the first floor is $30,000 / 2 = $15,000. The rent for the second floor is $15,000 / 2 = $7,500. The department occupies 10,000 square feet on the second floor, so the rent for that space is $7,500 / 25,000 * 10,000 = $3,000.

A Company Rents a Building with a Total of 50,000