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(I am unsure of order of segments) Shoe Shock Innovations manufactures athletic shoe inserts that cushion the foot and reduce the impact of exercise on
(I am unsure of order of segments)
Shoe Shock Innovations manufactures athletic shoe inserts that cushion the foot and reduce the impact of exercise on the joints. The company has two divisions, Sole Inserts and Heel Inserts. A segmented income statement from last month follows. Sole Inserts Division Heel Inserts Division Total Shoe Shock $496,000 $2,505,000 $3,001,000 2,020,000 2,324,000 677,000 474,600 202,400 174,900 $27,500 Sales revenue Less variable expenses Contribution margin Less traceable fixed expenses 304,000 192,000 124,800 $67,200 485,000 349,800 $135,200 Segment margin Common fixed costs Net operating income Chris Kelly is Shoe Shock's sales manager. Although this statement provides useful information, Chris wants to know how well the company's two distribution channels, specialty footwear stores and drug stores, are performing. Marketing data indicates that 20% of sole inserts and 75% of heel inserts are sold through specialty footwear stores. A recent analysis of corporate fixed costs revealed that 50% of all fixed costs are traceable to specialty footwear stores and 45% of all fixed costs to drug storesStep by Step Solution
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