Gross rental revenue, Cost Accounting

Operating Income

1. Operating Income is derived from two sources, Rental Income from businesses operating in the warehouse complex and Interest Income of the project operating account (when in positive balance)

  • Details in respect to Operating Interest Income are explained elsewhere in the assignment details.
  • Rental Income is based on industry averages in the area. The annual lease for each store is set relatively low at the inception of the project to attract traders to the complex.  Past experience, demographic trends, economic indicators etc are used to determine the expected level and growth of trading throughout the life of the project.  These figures provide the initial expected rental revenue andthe expected annual growth of annual rental revenue.

Operating Expenses

1. Advertising is calculated as a percentage of Gross Rental Revenue.

2. Council Rates are calculated as a percentage of the value of the land used in the project.  The amount paid for Rates is expected to increase by the inflation rate each year after the initial year of the investment.

3. Light & power (for security lighting and airconditions plant) is a fixed amount per annum projected to increase by the inflation rate each year after the initial year of the investment.  Tenants pay for their own power usage.

4. Telephone costs for the administration office are determined from the following;

  • A fixed rental of equipment over the life of the project.
  • Calls are calculated as a percentage of the Gross Rental Revenue as it is considered that the level of telephone calls is closely related to the commercial activity of the warehouse complex.
Posted Date: 3/2/2013 12:44:36 AM | Location : United States







Related Discussions:- Gross rental revenue, Assignment Help, Ask Question on Gross rental revenue, Get Answer, Expert's Help, Gross rental revenue Discussions

Write discussion on Gross rental revenue
Your posts are moderated
Related Questions

Good Food Company is a local manufacturer of instant noodles. Established in 2005, their business has been growing steadily. Their products, which are available in 3 flavors, are s

Classic Coolers manufactures portable coolers adorned with college logos. During the first quarter of the year, the company had the following costs: Direct materials used $55,500 D


Eagle Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Comput

what are thereasons for holding inventories

A foreign company plans to clear several dozen acres of ecologically valuable mangrove swamp in Vietnam for the creation of a shrimp aquaculture facility.  This decision will creat

CVP and Computer Applications The broad availability of personal computers encourages more managers to apply cost volume profit analysis. Computers can quickly create the comp

Single Limiting Factor Where a single limiting factor exists for the decision making sequence may be implemented given as:- - Compute the contribution per unit of limiting

How many pounds of guava puree are required? a. In a month? b. How many in a year? In computing the Total Landed cost for mango concentrate, we are interested in the incre