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 What is the amount of allocated fixed costs to be assigned to Customer Z Group of answer choices $580,000 $420,000 $400,000 $600,000 Exhibit 7 4 The following segmented annual income statement is for Paper Products, Inc Product Lines Plain Lined Color Total Sales revenue $25,000 $100,000 $125,000 $250,000 Variable costs 15,000 50,000 85,000 150,000 Contribution margin $10,000 $50,000 $ 40,000 $100,000 Direct fixed costs 4,000 6,000 9,000 19,000 Allocated fixed costs 45,000 Profit (loss) $ $ $ $ Refer to Exhibit 7 4 If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue, what is the profit or (loss) for Color Group of answer choices $8,500 $16,000 $31,000 $13,000 In which of the following cases is a customer most likely to be dropped Group of answer choices When the customers variable costs are more than its total fixed costs When the customers avoidable fixed costs are more than its contribution margin When the customers total fixed costs are more than its contribution margin None of the answer choices is correct Reinhart Company would like to purchase a new machine for $5,000,000 The machine is expected to have a life of five years, and a salvage value of $1,000,000 Annual maintenance costs will total $300,000 Annual labor and material savings are predicted to be $2,000,000 The company's required rate of return is 26 percent What is the payback period for this investment (round to the nearest month) Group of answer choices 1 year, 11 months 1 year, 9 months 2 years, 9 months 2 years, 11 months

Question

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  What is the amount of allocated fixed costs to be assigned to Customer Z  Group of answer choices $580,000 $420,000 $400,000 $600,000 Exhibit 7 4 The following segmented annual income statement is for Paper Products, Inc  Product Lines Plain Lined Color Total Sales revenue $25,000 $100,000 $125,000 $250,000 Variable costs 15,000 50,000 85,000 150,000 Contribution margin $10,000 $50,000 $ 40,000 $100,000 Direct fixed costs 4,000 6,000 9,000 19,000 Allocated fixed costs       45,000 Profit (loss) $   $   $   $   Refer to Exhibit 7 4  If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue, what is the profit or (loss) for Color  Group of answer choices $8,500 $16,000 $31,000 $13,000 In which of the following cases is a customer most likely to be dropped  Group of answer choices When the customers variable costs are more than its total fixed costs  When the customers avoidable fixed costs are more than its contribution margin  When the customers total fixed costs are more than its contribution margin  None of the answer choices is correct  Reinhart Company would like to purchase a new machine for $5,000,000  The machine is expected to have a life of five years, and a salvage value of $1,000,000  Annual maintenance costs will total $300,000  Annual labor and material savings are predicted to be $2,000,000  The company's required rate of return is 26 percent  What is the payback period for this investment (round to the nearest month)  Group of answer choices 1 year, 11 months  1 year, 9 months  2 years, 9 months  2 years, 11 months

Accepted Answer

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	Product Lines
	Plain	Lined	Color	Total
Sales revenue	$25,000	$100,000	$125,000	$250,000
Variable costs	15,000	50,000	85,000	150,000
Contribution margin	$10,000	$50,000	$ 40,000	$100,000
Direct fixed costs	4,000	6,000	9,000	19,000
Allocated fixed costs	?	?	?	45,000
Profit (loss)	$ ?	$ ?	$ ?	$ ?

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

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