Exercise D8-19 Luis Herrera, an up-and-coming fashion designer, created a new line of mens fashion socks in response to the growing number of celebrities who are expressing their individuality by replacing traditional navy and black socks with brighter colors and bold patterns. At a sales price of $9.95 per pair, Luis estimates monthly sales volume will be 20,300 pairs. Variable product costs will be $6.30 per pair and fixed overhead will be $1.60 per pair. Half of the fixed overhead is directly traceable to the new sock line. To promote the socks, Herrera proposes a $0.55 per pair commission to the companys salespeople and a $10,050 per month advertising campaign. In compliance with corporate policy, the socks will also be allocated $24,900 in fixed corporate support costs.

B: Prepare a traditional monthly income statement for the proposed sock line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Luis Herrera Monthly Income Statement $ $ $ Prepare a monthly income statement that highlights the proposed sock lines segment margin. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Luis Herrera Monthly Income Statement $

C: Which income statement would you recommend that Luis use when pitching the proposed sock line to company managers?