-n. 11 & App. A Saved 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 last month is given below: Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling and administrative Depreciation Total traceable fixed expenses Connon fixed expenses Divisional segment margin Operating income Total Company Divisions Cloth Leather R 4,420,000 2,103,500 2,316,500 R 2,600,000 R 1,820,000 1,110,000 993,500 1,490,000 826,500 708,000 450,000 258,000 592,000 360,000 232,000 259,000 130,000 129,000 1,559,000 940,000 619,000 757,500 " R 550,000 207,500 405,000 R 352,500 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: Sales Traceable fixed expenses: Advertising Leather Division Product Lines Garments R650,000 Shoes R800,000 Handbags R370,000 R 70,000 R 86,000 R102,000 1-63-000 Help Save & Exit