Required: 1. Prepare a contribution fomat segmented income statement for the Leather Division, with segments defined as product lines 3. Pefer to the statement prepared in th above. The sales managet wants to fun a speciai promotionat campaign on one of the produc ines over the riest inonth. A morkeeng study indicates that such a carmpogn would increase sates of the Garments product line by R217,000 or sites of the shioes product line by R102,000. The campaign would cost Ba2.000 a. Compule the incteased operating income for these product linet for the expscted increated sales b. Esed on the above renuts which product line should be chaveo? Garments Shoes Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product lines. Required: 1. Prepare a contribution format segmented income statement for the Leather Division. with segments defined as product lines. Severo S. A of Sao Paulo, Brazil. is organized into two divisions. The company's coxtribution format segmented income statement fin terms of the Brazilian currescy, the teal. Bg for last month k given below. Top management can' understand wly the Leather Division tias such a low segment margiri when its fales are only 70x hess than sales in the Cloth Division. As one step in solating the problem, managernent has directed that the LeMther Oivision be further segmented into product snes. The foliowing information is available on the product lines in the Leather Oiveion: 2. Management is surprised by the handbag product line's poor showing and would like to have the product line segmented by market. The following information is available about the markets in which the handbag line is sold: All of the handbag product line's selling and administrative expenses and depreciation are common to the markets in which the product is sold. Prepare a contribution format segmented income statement for the handbag product line with segments defined as markets. Severo SA 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: 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 avallable on the product lines in the Leather Divislon: 3. Refer to the statement prepared in (1) above. The sales manager wants to run a special promotional campaign on one of the product lines over the next month. A marketing study indicates that such a campaign would increase sales of the Garments product line by R217,000 or sales of the shoes product line by R162,000. The campaign would cost R32,000. o. Compute the increased operating income for these product lines for the expected increased sales. b. Based on the above results, which product line should be chosen? Garments Shoes 2. Management is surprised by the hasndbag product line's poor showing and would ike to have the product line segmented by market. The following information is avillable about the markets in which the handbag line is sold: Al of the handbag product line's selling and administrativo expenses and depreciation are common to the matkets in which thio product is sold. Prepare a contibution format segmented income staternent for the handbaj product line with segmonts defined as markets