Ridgeway Associates rents space to landscape design business and an environmental consulting business. Ridgeway Associates provides payroll/tax reporting services and custodial services as part of the rental contract. To determine the monthly rental fee, Ridgeway Associates must allocate the payroll/tax reporting costs and the custodial services costs to the landscape design business and the environmental consulting. Payroll/tax reporting services are allocated based on number of employees and custodial services are allocated based on space occupied. Costs reported are for the year.

REQUIRED

If Ridgeway Associates uses the direct method to allocate costs, what are the monthly rental charges for the landscape design business and the environmental consulting business? (Hint: First, allocate the payroll/tax reporting services costs and the custodial services costs to the landscape design business and the environmental consulting business. Then, add the direct costs and allocated costs together and divide by 12 (months in a year).)

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Рaугoll/аx Reporting Services Custodial Services Pet Store Grooming Direct costs # employees Space occupied (m?) $60,000 $40,000 3 1,000 $72,000 5 3,000 $90,000 5,000 1,000