Kofi & Sons Enterprises operates two departments, Department P and Department Q. At the en… — JAMB UTME

Kofi & Sons Enterprises operates two departments, Department P and Department Q. At the end of the trading period, total Rent and Rates incurred amounted to $\text{₦}200,000$ . The records provide the following information:

- Floor area occupied: Department P = $1,200\text{ m}^2$ ; Department Q = $800\text{ m}^2$
- Sales turnover: Department P = $\text{₦}300,000$ ; Department Q = $\text{₦}700,000$

What is the correct amount of Rent and Rates to be apportioned to Department P?

A
₦60,000
B
₦80,000
C
₦100,000
₦120,000Cevap

Cevap

The correct amount of Rent and Rates to be apportioned to Department P is ₦120,000.

Rent and Rates are space-based expenses and must be apportioned based on floor area occupied. Department P occupies

1,200\text{ m}^2

out of a total

2,000\text{ m}^2

, which is

\frac{3}{5}

60\%

. Multiplying

60\%

by total rent of

\text{₦}200,000

yields

\text{₦}120,000

Adım Adım Çözüm

Identify the appropriate basis for apportioning Rent and Rates.

Rent and Rates should be apportioned according to floor area occupied by each department.

Rent is a space-related indirect expense, so floor area provides an equitable basis of apportionment.

Calculate total floor area and Department P's share ratio.

Total floor area =

1,200\text{ m}^2 + 800\text{ m}^2 = 2,000\text{ m}^2

. Department P's ratio =

\frac{1,200}{2,000} = \frac{3}{5}

Determining the proportion of space utilized by Department P relative to the total space.

Calculate Department P's share of total Rent and Rates.

Department P's Rent =

\frac{3}{5} \times \text{₦}200,000 = \text{₦}120,000

Multiplying the total expense by Department P's floor area proportion.

Anahtar Kavram

Apportionment of Indirect Departmental Expenses

Tahmini Süre:1m 30s

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