Marsden Company has three departments occupying the following amount of floor space: Department 1 15,000 sq. ft. Department 2 10,000 sq. ft. Department 3 25,000 sq. ft. How much store rent should be allocated to Department 3 if total rent is equal to $200,000?

the store rent that should be allocated in department 3 is $100000

Explanation:

if we assume that we charge the rent per square feet occupied, then we can say

department rent = charge per square feet * number of square feets

r = k*sf

also if

total rent = rent department 1 + rent department 2 + rent department 3

r total = r1 + r2 + r3 = k*sf1 + k*sf2 + k*sf3 = k * (sf1 + sf2 + sf3)

k = r total / (sf1 + sf2 + sf3)

replacing values

k = $200000 / (15000 sq. ft + 10000 sq. ft + 25000 sq. ft) = $ 4 per sq. ft

thus for department 3

r3 = k * sf3 = $ 4 per sq. ft * 25000 sq. ft = $100000

rent department 3 = $100000