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! 6,200 $ 1,250,000 6,275 $ 269,750 Tix 14,900 $ 880,000 4,275 $ 389,625 $ Total 21,100 $ 2,130,000 10,550 659,375 $ 527,500 Required: a. Compute the predetermined overhead rate used to apply administrative costs to the two services assuming SMI uses the number of users to allocate administrative costs. b. Based on the rates computed in requirement (a), what is the profit for each service? 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! 6,200 $ 1,250,000 6,275 $ 269,750 Tix 14,900 $ 880,000 4,275 $ 389,625 $ Total 21,100 $ 2,130,000 10,550 659,375 $ 527,500 Required: a. Compute the predetermined overhead rate used to apply administrative costs to the two services assuming SMI uses the number of users to allocate administrative costs. b. Based on the rates computed in requirement (a), what is the profit for each service?
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher
Posted Date:
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