Accounting for IGCSE & O level - Final Statements (Section 8 - No. 34)
What is the best way to allocate rent expense to different departments?
Allocate equally among all departments.
Allocate in proportion to each department's sales.
Allocate in proportion to the space occupied by each department.
Allocate based on number of employees in each department.
Explanation
This is the most accurate way to assign rent expense because it is based on the space each department uses.