Lemon Twist is a website design and consulting firm based in Corvallis. The firm currently bills clients based on Direct Labor Costs plus a margin to cover Overhead Expenses and to provide a Profit Margin. The current Direct Labor Cost is $100 per hour and the company bills clients at $200 per hour of Direct Labor. The firm is considering using a job cost system in which each client is a different job. Lemon Twist thinks they can trace direct labor, software licensing costs, and travel costs directly to each job (client) but it is not sure how to allocate Overhead Expenses (Support staff salaries, Computer leases, Office supplies and Office Rent). At the beginning of the year, managing partner Jackie Milici prepared the following estimates for 2021:1 Direct labor hours Direct labor costs Software licensing costs Travel costs Support staff salaries Computer leases Office supplies Office rent 14,000 hours $1,400,000 $50,000 $80,000 $200,000 $50,000 $30,000 $60,000 In the past month Lemmon Twist served three clients. Records shown below: Dining Corp Oregon Exp Lucidyne Direct Labor Hours 600 hours 50 hours 300 hours Software licensing costs $5,000 $500 $2,000 Travel costs $9,000 $2,000 $0 1. Develop at least two Overhead Cost Pools using the information provided and calculate an allocation rate for each one. (4 points) 2. Construct a Job Cost Report for managers showing how all costs are allocated to each of the three jobs (clients) listed. (6 points) 3. Write a business memo about cost allocation issues. In your analysis explain the reasons why Lemmon Twist managers should assign all costs to jobs. Managers also want to know the factors they should consider when setting prices. If managers want to earn profits equal to 20% of sales revenue, what price should the company charge each client? (10 points)