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HELP ONLY WITH USER RELATED ADMINISTRATIVE COST PER USER QUESTION A SECOND COLUMN Social Media, Inc. (SMI) has two services for users. Toot!, which connects
HELP ONLY WITH USER RELATED ADMINISTRATIVE COST PER USER QUESTION A SECOND COLUMN
Social Media, Inc. (SMI) has two services for users. Toot!, which connects tutors with students who are looking for tutoring services, and TiX, which can be used to buy, sell, or exchange event tickets. For the following year, SMI expects the following results. Users Revenues Engineering hours Engineering cost Administrative costs Toot! 12,500 $1,750,000 9,025 $ 642,875 Tix 19,600 $1,680,000 7,025 $ 761,500 Total 32, 100 $3,430,000 16,50 $1,484,375 $1,123,500 The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. The company is considering using Engineering Hours and Users as the allocation base. Additional information follows. Toot! 9,025 12,500 Tix 7,025 19,600 Engineering hours Users Engineering-hour related administrative cost User-related administrative cost Total 16,050 32,100 $ 154,080 $ 969,420 Required: a. Compute the predetermined overhead rate used to apply the two administrative costs pools to the two services assuming SMI uses the proposed two-stage cost system to allocate administrative costs. b. Based on the rates computed in requirement (a), what is the profit for each service? Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined overhead rate used to apply the two administrative costs pools to the two services assuming SMI uses the proposed two-stage cost system to allocate administrative costs. (Round your answers to 2 decimal places.) Predetermined Overhead Rate Engineering-hour related administrative cost $ 70.00 per engineering-hour User-related administrative cost per userStep by Step Solution
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