Gary's business is booming! Plans are in place to expand the existing facility. But in the meantime, both of the key operating divisions needed storage space for their raw materials. Operating Unit Thumbdrive (OUT) needs 2,000 square feet of space, and Operating Unit Racket (OUR) needs 3,000 square feet of space. OUT's manager got a bid of $592/month for storage space, while OUR's manager received a bid of $888/month for storage space. Gary believes it would be prudent to find space that would fit both of the operating units' needs. The cost of that space-which allows additional room for each unit-would be $1,340/month. He goes ahead and rents this space for 6 months.
Gary's business is booming! Plans are in place to expand the existing facility. But in the meantime, both of the key operating divisions needed storage space for their raw materials. Operating Unit Thumbdrive (OUT) needs 2,000 square feet of space, and Operating Unit Racket (OUR) needs 3,000 square feet of space. OUT's manager got a bid of $592/month for storage space, while OUR's manager received a bid of $888/month for storage space. Gary believes it would be prudent to find space that would fit both of the operating units' needs. The cost of that space-which allows additional room for each unit-would be $1,340/month. He goes ahead and rents this space for 6 months.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Gary's business is booming! Plans are in place to expand the existing facility. But in the meantime, both of the key operating divisions
needed storage space for their raw materials. Operating Unit Thumbdrive (OUT) needs 2,000 square feet of space, and Operating Unit
Racket (OUR) needs 3,000 square feet of space. OUT's manager got a bid of $592/month for storage space, while OUR's manager
received a bid of $888/month for storage space.
Gary believes it would be prudent to find space that would fit both of the operating units' needs. The cost of that space-which allows
additional room for each unit-would be $1,340/month. He goes ahead and rents this space for 6 months.
(a)
Using the stand-alone method, determine how much of the common storage space cost will be allocated to each operating unit.
(Round percentage of total to 2 decimal places, e.g. 15.25% and final answers to 2 decimal places, e.g. 15.25.)
Common storage space costs $
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