Problem 6-57 (Algo) Predetermined Rates and Product Profitability: Two Stage Cost Allocation (LO 6-3, 4,5) 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 8,900 $1,450,000 7,375 $ 402,500 Tix 16,600 $1,200,000 5,375 $ 521,875 Total 25,500 $2,050,000 12,750 $ 924,375 $739,500 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. Engineering hours Users Engineering-hour related administrative cost User-related administrative cost Toot! Tix 7,375 5,375 Total 12,750 8,900 16,600 25,500 $107,100 $ 632,400 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. Dacar on the rator remetart in ram dramant fast ie the rent for each eandra? Prey 1 of 4 Next >