9.2 question managerial accounting

Award: 20.00 points Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for month is given below: Divisions Total Company Cloth Leather Sales R 4,590,000 R 2,700,000 R 1,890,000 Variable expenses 2,099,700 1,130,000 969,700 Contribution margin 2,490,300 1,570,000 920,300 Traceable fixed expenses: Advertising 785.000 470,000 315,000 Selling and administrative 614,000 380,000 234,000 Depreciation 263,000 132.000 131.000 Total traceable fixed expenses 1,662,000 982,000 680.000 Divisional segment margin 28,300 588,000 R 240,300 Common fixed expenses 407.000 Operating income R 421,300 Show all IMG-1628.jpg IMG-1625.jpg 2:25 PM O O JOC 2020-04-10Course X Ill MacEwe X M (no sub X Assign X Assignr X Assigna X Assignt X Assign X C Search X + X ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=2.&postSubmissionView=13252710632849399&wid=13252... S Top management can't understand why the Leather Division has such a low segment margin when its sales are only 30% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines. The following information is available on the product lines in the Leather Division: Leather Division Product Lines Garments Shoes Handbags Sales R670,000 R800,000 R420,000 Traceable fixed expenses. Advertising R 97,000 R 84,000 R134,000 Selling and administrative R 47,000 R 52,000 R 60,000 Depreciation R 36,000 R 73,000 R 22,000 Variable expenses as a percentage of sales 65% 40% 51% Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product lines. Required: . Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines.Course X !! MacEw X M (no sub X Assignn X Assign X Assign X Assign X Assigns X C Search X + C X ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=2.&postSubmissionView=13252710632849399&wid=13252... Required: S 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Product Line Leather Division Garments Shoes Handbags R R R R Traceable fixed expenses: Total traceable fixed expenses R R R Common fixed expenses: R 2. Management is surprised by the handbag product line's poor showing and would like to have the product line segmented by market. The following information is available about the markets in which the handbag line is sold: Handbag Markets Show all G-1628.jpg IMG-1625.jpg 2:25 PM 2020-04-10 O hmCourse X ll MacEw X M (no sub X Assignn X Assignt X Assign X Assign X Assign X C Search X + X C ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=2.&postSubmissionView=13252710632849399&wid=13252.. S 2. Management is surprised by the handbag product line's poor showing and would like to have the product line segmented by market. The following information is available about the markets in which the handbag line is sold: Handbag Markets Domestic Sales Foreign R350,000 Traceable fixed expenses: R 70,000 Advertising R 25,000 R109,000 Variable expenses as a percentage of sales 44% 86% All of the handbag product line's selling and administrative expenses and depreciation are common to the markets in which the product is sold. Prepare a contribution format segmented income statement for the handbag product line with segments defined as markets. Sales Market Handbags Domestic Foreign R R R Traceable fixed expenses: R R Common fixed expenses: Show all Total common fived ovnancac 2:25 PM G-1628.jpg IMG-1625.jpg 2020-04-10 F O OCourse X Ill MacEw X M (no sub X Assignn X Assign X Assign X Assign X Assign X @ Search X + C X ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=2.&postSubmissionView=13252710632849399&wid=13252.. S Sales Market Handbags Domestic R Foreign R R Traceable fixed expenses: R R Common fixed expenses: Total common fixed expenses R 3. Refer to the statement prepared in (1) above. The sales manager wants to run a special promotional campaign on one of the product lines over the next month. A marketing study indicates that such a campaign would increase sales of the Garments product line by R217,000 or sales of the shoes product line by R162,000. The campaign would cost R32,000. a. Compute the increased operating income for these product lines for the expected increased sales. Garments Shoes Increased operating income R R Show all IMG-1628.jpg IMG-1625.jpg 2:25 PM LO O 2020-04-10Course > X ! MacEw X M (no sub X| Assignn X Assign X Assignr X Assign X Assigns X @ Search X + X - C ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=2.&postSubmissionView=13252710632849399&wid=13252.. S . .. 3. Refer to the statement prepared in (1) above. The sales manager wants to run a special promotional campaign on one of the product lines over the next month. A marketing study indicates that such a campaign would increase sales of the Garments product line by R217,000 or sales of the shoes product line by R162,000. The campaign would cost R32,000. a. Compute the increased operating income for these product lines for the expected increased sales. Garments Shoes ncreased operating income R R b. Based on the above results, which product line should be chosen? Garments Shoes References Worksheet Learning Objective: 11-01 Prepare a segmented income statement using the contribution format, and explain the difference between traceable fixed costs and common fixed costs. Show all 2:26 PM IMG-1628.jpg IMG-1625.jpg 2020-04-10 LO O hp