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How much of the joint cost should be assigned to Unit B using the value basis of allocation?

How much of the joint cost should be assigned to Unit B using the value basis of allocation?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QS 22-18C Joint cost allocation LO C3

A company purchases a 10,020-square-foot commercial building for $325,000 and spends an additional $50,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 3,340 square feet, will be rented for $1.00 per square foot. Unit B contains 6,680 square feet and will be rented for $0.75 per square foot.

How much of the joint cost should be assigned to Unit B using the value basis of allocation?
  

QS 22-18C Joint cost allocation LO C3 A company purchases a 10,020-square-foot commercial building for $325,000 and spends an additional $50,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 3,340 square feet, will be rented for $1.00 per square foot. Unit B contains 6,680 square feet and will be rented for $0.75 per square foot. How much of the joint cost should be assigned to Unit B using the value basis of allocation? Percent of Market Value Apportioned Cost Market Value Joint Cost Numerator Denominator % of Mkt Value Unit A Unit B Totals 0.00%
Transcribed Image Text:QS 22-18C Joint cost allocation LO C3 A company purchases a 10,020-square-foot commercial building for $325,000 and spends an additional $50,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 3,340 square feet, will be rented for $1.00 per square foot. Unit B contains 6,680 square feet and will be rented for $0.75 per square foot. How much of the joint cost should be assigned to Unit B using the value basis of allocation? Percent of Market Value Apportioned Cost Market Value Joint Cost Numerator Denominator % of Mkt Value Unit A Unit B Totals 0.00%
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