1. An accounting firm uses activity-based costing. The firm has to drop one of the following three customers, which consume the following activities.

   	Xavier	Young	Zanes
   Direct costs	$10,000	$50,000	$25,000
   Partner hours	120	250	110
   Filings	10	15	17
   Interview hours	100	350	250

   The accounting firm has the following budgeted activity cost pool information.

   	Cost pool	Activity driver	Activity driver
   Consulting	$500,000	Partner hours	320
   Filing	$250,000	Filings	200
   Customer Service	$1,250,000	Interview hours	5,000

   Xavier is contracted to pay $650,000. Young is contracted to pay $1,000,000. Zanes is contracted to pay $750,000.

   What is the optimal profit that can be earned from these customers?

   	a.	$884,375
   	b.	$922,250
   	c.	$868,125
   	d.	$1,337,500