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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

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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. 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. SMI thought that maybe there should be three types of administrative costs. They felt that some of the costs in the User-related pool were more related to revenue than to users. Specifically, they revised their breakdown of administrative costs as follows. Required: a. Compute the predetermined overhead rate used to apply the three administrative costs pools to the two services assuming SM! uses the 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

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