Social Media, Inc. (SMI) has two services for users. Toot!, which connects tutors with students who...
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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 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! 14,900 $1,950,000 Tix 21,600 $2,000,000 10,125 $ 830,625 8,125 $ 948,750 Total 36,500 $3,950,000 18,250 $1,779,375 $1,423,500 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 10,125 8,125 Users 14,900 21,600 Total 18,250 36,500 Engineering-hour related administrative cost User-related administrative cost $ 189,800 $1,233,700 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 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 Predetermined Overhead Rate per engineering-hour User-related administrative cost per user Required A Required B > 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! 14,900 $1,950,000 Tix 21,600 $2,000,000 10,125 $ 830,625 8,125 $ 948,750 Total 36,500 $3,950,000 18,250 $1,779,375 $1,423,500 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 10,125 8,125 Users 14,900 21,600 Total 18,250 36,500 Engineering-hour related administrative cost User-related administrative cost $ 189,800 $1,233,700 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 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 Predetermined Overhead Rate per engineering-hour User-related administrative cost per user Required A Required B >
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