Diva Footwear Is Contemplating If It Should Continue Producing Platform

question 20

Multiple Choice

Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company's segments $\begin{array}{lrrr}&\text { Platform Shoes}&\text { Athletic Shoes}&\text { Boots }\\\hline\text { Sales } & \$ 120,000 & \$ 420,000 & \$ 360,000 \\\text { Variable costs } & 64,000 & 220,000 & 140,000\\\text { Contribution margin } & 56,000 & 200,000 & 220,000 \\\text { Direct fixed costs } & 45,000 & 70,000 & 90,000 \\\text { Allocated fixed costs } & 20,000 & 70,000 & 60,000\\\text { Net income }&(\$9,000) &\$60,000&\$70,000\end{array}$ Based on the information provided, which of the following is most likely to be the basis of allocating the fixed costs to the segments?

• A) Sales
• B) Direct fixed costs
• C) Net income
• D) Variable costs

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Definitions:

Hardware And Software

Refers respectively to the physical components of a computer or computing system and the programs or operating systems used to control and manage the hardware.

-As-A-Service

A suffix used in technology industries to describe the delivery of various services over the internet, emphasizing a subscription-based or on-demand model.

Software Development

The comprehensive process involving planning, coding, testing, and maintaining applications or systems software.

Cloud Computing

The delivery of computing services—including servers, storage, databases, networking, software—over the internet to offer faster innovation, flexible resources, and economies of scale.