Harbor Corp currently leases a corporate suite in an office building for a cost of $ 260,000 a year. Only 88 ​% of the corporate suite is currently being used. A startminus up business has proposed a plan that would use the other 12 ​% of the suite and increase the overall costs of maintaining the space by $ 25,659 .
a. If the standminus alone method were​ used, what amount of cost would be allocated to the startminus up ​business?

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Answer:

The correct answer to allocate the amount of cost would be allocated to the startminus up business is $56859

Lease rent allocated to startminus up business = $260000 × 12% = $31200

Allocation of overall costs of maintaining the space = $25659

Amount of cost allocated to the startminus up business = $31200 + $25659 = $56859