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	$498,300	$2,523,000	$3,021,300
Less variable expenses	311,000	2,036,000	2,347,000
Contribution margin	187,300	487,000	674,300
Less traceable fixed expenses	124,200	349,700	473,900
Segment margin	$63,100	$137,300	200,400
Common fixed costs	170,600
Net operating income	$29,800

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).)

Specialty Footwear Stores	Drug Stores	Total Shoe Shock
Heel insertsSole insertsTotal revenueCommon fixed expensesSegment marginTotal variable expensesRevenueContribution marginTraceable fixed expensesOperating incomeVariable expenses
Contribution marginTotal variable expensesTraceable fixed expensesTotal revenueSegment marginCommon fixed expensesOperating incomeVariable expensesRevenueSole insertsHeel inserts	$	$	$
Total variable expensesContribution marginOperating incomeSole insertsTraceable fixed expensesSegment marginHeel insertsRevenueCommon fixed expensesTotal revenueVariable expenses
Traceable fixed expensesContribution marginHeel insertsVariable expensesOperating incomeSegment marginTotal variable expensesCommon fixed expensesSole insertsRevenueTotal revenue	$	$	$
LessAdd: common fixed expensessole insertstotal revenueheel insertscontribution margintotal variable expensessegment margintraceable fixed expensesvariable expensesoperating incomerevenue
Contribution marginRevenueOperating incomeTraceable fixed expensesTotal revenueSegment marginCommon fixed expensesSole insertsHeel insertsVariable expensesTotal variable expenses
Sole insertsCommon fixed expensesVariable expensesHeel insertsTotal variable expensesRevenueTraceable fixed expensesTotal revenueContribution marginOperating incomeSegment margin
Variable expensesRevenueTraceable fixed expensesSegmented marginContribution marginCommon fixed expensesOperating incomeSole insertsTotal variable expensesHeel insertsTotal revenue
Operating incomeRevenueContribution marginTraceable fixed expensesHeel insertsVariable expensesSegmented marginTotal revenueSole insertsCommon fixed expensesTotal variable expenses
Total variable expensesTraceable fixed expensesHeel insertsVariable expensesCommon fixed expensesTotal revenueSegmented marginContribution marginOperating incomeRevenueSole inserts
Traceable fixed expensesTotal revenueSegmented marginVariable expensesCommon fixed expensesOperating incomeRevenueSole insertsHeel insertsTotal variable expensesContribution margin	$	$
RevenueSole insertsContribution marginCommon fixed expensesTotal variable expensesTraceable fixed expensesHeel insertsTotal revenueVariable expensesOperating incomeSegmented margin
Contribution marginSegmented marginCommon fixed expensesVariable expensesSole insertsTotal variable expensesTraceable fixed expensesOperating incomeRevenueHeel insertsTotal revenue	$

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 $498,300 311,000 Heel Inserts Division $2,523,000 2,036,000 Total Shoe Shock Contribution margin Less traceable fixed expenses 187,300 487,000 674,300 124,200 349,700 473,900 Segment margin $63,100 $137,300 200,400 Revenue Less variable expenses $3,021,300 2,347,000 Common fixed costs 170,600 Net operating income $29,800 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).) Specialty Footwear Stores $ Total Shoe Shock $ $ : Drug Stores $ $ $ $ $ $