The Following Information Is Available for Diva Footwear's Segments Diva Footwear Normally Sells Boots for $90 Per Pair

question 48

Multiple Choice

The following information is available for Diva Footwear's segments: $\begin{array}{lrrr}&\text { Platform Shoes }&\text { Athletic Shoes }&\text { Boots }\\\hline\text { Sales } & \$ 120,000 & \$ 420,000 & \$ 360,000 \\\text { Variable costs } & 64,000 & 220,000 & 140,000\\\text { Contribution margin } & 56,000 & 200,000 & 220,000 \\\text { Direct fixed costs } & 45,000 & 70,000 & 90,000 \\\text { Allocated fixed costs } & 20,000 & 70,000 & 60,000 \\\text { Net income }&(\$9,000) &\$60,000&\$70,000\end{array}$ Diva Footwear normally sells boots for $90 per pair.An exporter has approached Diva about buying 1,000 pairs of boots for a one-time export deal for $81 per pair.Diva can avoid $3.00 per pair of the normal variable cost on this sale, but Diva must pay a fixed cost of $4,000 to have the boots shipped.Diva has the capacity to produce this order, and no regular sales will be affected.What affect will occur on Diva's profits if the order is accepted?

• A)Profits will increase by $42,000.
• B)Profits will increase by $49,000.
• C)Profits will increase by $45,000.
• D)More information is needed to answer.

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An overview of the assets, liabilities, and equity of an entity at a specific point in time, reflecting its economic resources and obligations.

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False and damaging statements made about a person or organization, potentially leading to legal action.

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An unlawful act of entering someone's land or property without permission, which can also extend to interference with a person's rights or possessions.