Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
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. Toot! Tix Total Users 12,500 19,600 32,100 Revenues $1,750,000 $1,680,000 $3,430,000 Engineering hours 9,025 7,025 16,050 Engineering cost $ 642,875 $ 761,500 $1,404,375 Administrative costs $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! Tix Engineering hours 19,600 Engineering-hour related administrative cost 7,025 9,025 12,500 Total 16,050 32,100 $ 154,080 $ 969,420 Users User-related administrative cost Required: a. Compute the predetermined overhead rate used to apply the two administrative costs pools to the two services assuming SM 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 por engineering hour User-related administrative cost per user Required Heged > Required: a. Compute the predetermined overhead rate used to apply the two administrative costs pools to the two services assuming SMl uses the proposed two-stage cost system to allocate administrative costs. b. Based on the rates computed in requirement (), what is the profit for each service? Complete this question by entering your answers in the tabs below. Required A Required B Based on the rates computed in requirement (a), what is the profit for each service? (Do not round Intermediate calculations.) Profit Service Toot! TIX

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Electronics Data Processing Systems

Authors: WATNE

1st Edition

0130516163, 978-0130516169

More Books

Students also viewed these Accounting questions

Question

Describe how to train managers to coach employees. page 404

Answered: 1 week ago

Question

Discuss the steps in the development planning process. page 381

Answered: 1 week ago