The Marsden Company has three different departments which acquire different floor spaces. The premises is a rental premise and the rent have to be divided based on the area in square feet.
Given
Total rent is $200,000
Area of D1 is 15,000 sq. ft.
Area of D2 is 10,000 sq. ft.
Area of D3 is 25,000 sq. ft.
We have to find the rent of Department 3 which has the area of 25,000 sq.ft.
[tex]\rm Rent\: per\: square\: feet=\dfrac{Total\:rent}{Total\:area} \\\\Rent\: per\: square\: feet= \dfrac{\$200,000}{D1+D2+D3} \\\\Rent\: per\: square\: feet=\dfrac{\$200,000}{50,000 sq.fr.} \\\\Rent\: per\: square\: feet= \$4[/tex]
Area of D3 multiplied by Rent per square feet will give us the rent of D3.
Thus , [tex]25,000 x \$4 = \$100,000[/tex]
Therefore the rent of department 3 of Marsden Company is $100,000.
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