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 10,100 17,600 27,700 Revenues $ 1,550,000 $ 1,360,000 $ 2,910,000 Engineering hours 7,925 5,925 13,850 Engineering cost $ 477,125 $ 596,250 $ 1,073,375 Administrative costs $ 858,700

Required:

a. Compute the predetermined overhead rate used to apply administrative costs to the two services assuming SMI uses thenumber of usersto allocate administrative costs.

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