Problem 10-26 (Part Level Submission) 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
Revenue	$490,900	$2,543,000	$3,033,900
Less variable expenses	307,000	2,017,000	2,324,000
Contribution margin	183,900	526,000	709,900
Less traceable fixed expenses	124,100	348,700	472,800
Segment margin	$59,800	$177,300	237,100
Common fixed costs	172,400
Net operating income	$64,700

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 stores.

(a) Prepare a segment margin income statement for Shoe Shock?s two distribution channels.(If the amount is negative then enter with a negative sign preceding the number e.g. -5,125 or parenthesis. e.g. (5,125).)

3/31/2016 Problem 1026 (Part Level Submission) Print by: Abby Bachman GB519: Measurement and Decision Making 1602D01 / Unit 6 Final Exam Graded GB519 *Problem 1026 (Part Level Submission) 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 Revenue Heel Inserts Division Total Shoe Shock $490,900 $2,543,000 $3,033,900 Less variable expenses 307,000 2,017,000 2,324,000 Contribution margin 183,900 526,000 709,900 Less traceable fixed expenses 124,100 348,700 472,800 Segment margin $59,800 $177,300 237,100 Common fixed costs 172,400 Net operating income $64,700 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 stores. *(a) Prepare a segment margin income statement for Shoe Shock's two distribution channels. (If the amount is negative then enter with a negative sign preceding the numb Specialty Footwear Stores $ Drug Stores $ $ $ $ $ : Attempts: 0 of 1 used *(b) The parts of this question must be completed in order. This part will be available when you complete the part above. Copyright 20002016 by John Wiley & Sons, Inc. or related companies. All rights reserved. http://edugen.wiley.com/edugen/shared/assignment/test/qprint.uni 1/1