Social Media, Inc. (SMI) has two services for users. Toot!, which connects tut0rs with students who are looking for tut0rs 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		8,900			16,600			25,500
Revenues	$	1,450,000		$	1,200,000		$	2,650,000
Engineering hours		7,375			5,375			12,750
Engineering cost	$	402,500		$	521,875		$	924,375
Administrative costs							$	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.

	Toot!			TiX			Total
Engineering hours		7,375			5,375			12,750
Users		8,900			16,600			25,500
Engineering-hour-related administrative cost							$	107,100
User-related administrative cost							$	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.

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		per engineering-hour
User-related administrative cost		per user

b. Based on the rates computed in requirement (a), what is the profit for each service?

Based on the rates computed in requirement (a), what is the profit for each service? (Do not round intermediate calculations.)

Service	Profit
Toot!
TiX