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

Total Company

R$3,825,000$

Cloth

Leather $1,575,000$

$2,250,000$

$1,010,$

$879,754695,250$

$1,915,250$

Traceable fixed expenses

Advertising

$182,000$

$150$

$342,000$

Selling and administrative

$482\mathrm{.}000$

$221,000$

Depreciation

Total traceable fixed expenses Divisimal segment margin

$$22,210$

$730,000583,000$

$310,000$

$112,258$

Common Fixed expenses

$395,000$

eferences

Operating income

$227,250$

Top management can't understand why the Leather Divisaon 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

Leather Division Product Lines

Sarments Shors

$1550\mathrm{.}000$

Sales

Traceable fixed Advertising

Selling and administrative

Depreciation

Variable expenses as a percentage of sales

$34,000$

Sex

Analysis shows that R$109,000$ 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