Diva Footwear Is Contemplating If It Should Continue Producing Platform

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