A company purchases a 7,920-square-foot building for $410,000. The building has two separate rental units. Unit A, which has the desirable location on the corner and contains 1,620 square feet, will be rented for $2.00 per square foot. Unit B contains 6,300 square feet and will be rented for $1.20 per square foot.   How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company purchases a 7,920-square-foot building for $410,000. The building has two separate rental units. Unit A, which has the desirable location on the corner and contains 1,620 square feet, will be rented for $2.00 per square foot. Unit B contains 6,300 square feet and will be rented for $1.20 per square foot.
 
How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation?
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