Social Media, Inc. (SMI) has two services for users. Toot!, which connects tutos 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		11,300		18,600		29,900
Revenues	$	1,650,000	$	1,520,000	$	3,170,000
Engineering hours		8,475		6,475		14,950
Engineering cost	$	557,250	$	676,125	$	1,233,375
Administrative costs					$	986,700

Required:

a. Compute the predetermined overhead rate used to apply administrative costs to the two services assuming SMI uses the engineering cost to allocate administrative costs.

Predetermined overhead rate

%

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

Service	Profit
Toot!
TiX