Network Systems (NS) offers telecommunications design and consulting services to organizations. The rm offers two Wpes of contracts to its clients: a cost-plus 25% contract (i.e., the client pays 25% on top of the total cost of a job) and a xed-fee contract where NS quotes its clients a xed price for the job. For cost-plus contracts, total cost includes both direct costs and indirect costs (i.e., allocated overhead). NS completed 10 cost-plus contracts at a total direct cost of $450,000 and 15 xed-fee contracts. Revenues collected from the xed-fee contracts totaled $2,400,000 and the total direct cost of these xed-fee contracts amounted to $1,800,000. Total indirect costs (i.e., total overhead) for the rm was $350,000. 1. Allocate the indirect/overhead costs of $350,000 to the (a) xed-fee and (b) cost-plus 25% contracts using direct cost as the overhead allocation base. (5 points) 2. Allocate the indirect/overhead costs of $350,000 to the (a) xed-fee and (b) cost-plus 25% contracts using number of contracts as the overhead allocation base. (5 points) 3. Compare the costs allocated to the two types of contracts in 1 and 2. Given the rm's incentive to maximize prot, justify how NS would allocate overhead (based on direct cost, or number of contracts). Clearly explain your reasoning, including supporting calculations (2-4 sentences are appropriate). (3 points)