PROBLEM 6-1.lumber of Cost Pools [LO 1] lcon.com sells soft lines of business (software and consulting), and profht statements are prepared as follows: o two PROBLEMS o companies that conduct business over the Internet. The company is organized intn Software Consulting Sales Less direct costs Less allocated costs Income before taxes $15,000,000 6,000,000 5,250,000 3,750,000 $8,000,000 4,000,000 1,750,000 $2,250,000 Direct costs include costs that are easily associated with each line of business. For software, this includes the salary of programmers, the cost of computers used by programmers, and the cost of software manuals sold to customers. For consulting, direct costs include consultant salaries, computer costs, and travel costs. Allocated costs include costs that are not directly traced to the business units. These costs include employee benefits, rent, telecommunications costs, and general and administrative costs, such as the salary of the CEO of Icon.com. At the start of 2017, allocated costs were estimated as follows: Employee benefits Rent Telecommunications General and administrative costs Total $2,500,000 1,000,000 500,000 3,000,000 $7,000,000