Question

A company rents a building with a total of 100,000 square feet, which are evenly divided between two floors. The space on the first floor is considered twice as valuable as that 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 first floor

Answer 1

Answer:

$2,000

Explanation:

The total rent for the building is $30,000. If the space in the first floor is considered twice as valuable as the space in the first floor, it means that rent for the first floor is $20,000, while rent for the second floor is $10,000.

If we are charged $20,000 for 100,000 square feet, it means that each square feet costs $0.2. ($20,000 / 100,000 square feet).

Now, we simply multiply that figure by the area of the deparment store:

$0.2 x 4,000 square feet = $2,000

Thus, the monthly rental space for the department store should be $2,000