Exhibit 7-5 Accounting Services,Inc.has Two Customers.Customer X Generates $600,000 in Income After

Multiple Choice

Exhibit 7-5
Accounting Services,Inc.has two customers.Customer X generates $600,000 in income after direct fixed costs are deducted,and Customer Z generates $580,000 in income after direct fixed costs are deducted.Allocated fixed costs total $1,000,000 and are assigned 40 percent to Customer X and 60 percent to Customer Z.Total allocated fixed costs remain the same regardless of how these costs are assigned to customers.
-Refer to Exhibit 7-5.What is the amount of allocated fixed costs to be assigned to Customer Z?

A) $580,000
B) $420,000
C) $400,000
D) $600,000
E) None of the answer choices is correct.