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O O O O O Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company's
O O O O O Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company's segments. Platform Shoes Athletic Shoes Boots Sales $120,000 $420,000 $360,000 Variable costs 64,000 220,000 140,000 Contribution margin 56,000 200,000 220,000 Direct fixed costs 42,000 70,000 90,000 Allocated fixed costs 20,000 70,000 60,000 Net income ($ 6,000) $ 60,000 $ 70,000 If platform shoes are dropped, what effect will occur to Diva Footwear's net income? Increase by $9,000 Decrease by $14,000 Decrease by $11,000 Increase by $56,000 Increase by $14,000
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