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Social Media, Inc. (SMI) has two services for users. Toot!, which connects tutors with students who are looking for tutoring services, and TIX, which
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! 7,700 $1,350,000 6,825 $ 333,375 TiX 15,600 $1,040,000 4,825 $ 453,000 Total 23,300 $2,390,000 11,650 $ 786,375 $ 629,100 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 Toot! 6,825 Tix 4,825 Users 7,700 15,600 Total 11,650 23,300 Engineering-hour related administrative cost User-related administrative cost $ 93,200 $ 535,900 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. 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. co search TO 269LCU O 1-1 < Prev 4 of 6 Next > ? 79F Clear AOCE CICOL 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.) Engineering-hour related administrative cost User-related administrative cost Predetermined Overhead Rate per engineering-hour per user < Required A Required B > < Prev 4 of 6 Next > ere to search ? 79F Clear ^ LO 269LCU M-8 CI6OL 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. 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 Based on the rates computed in requirement (a), what is the profit for each service? (Do not round intermediate calculations.) Service Toot! TiX Profit Mc Graw Hill ype here to search TO 26ULCE ESC 14 < Prev 4 of 6 Next > F6 144 79F Clear F7 FIO F12 PS SL PB r 4) &
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