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: Divisions Total Company Cloth Leather Sales R 4,590,000 R 2,700,000 R1,890,000 Variable expenses 2,099,700 1,130,000 969,700 Contribution margin 2,490,300 1,570,000 920,300 Traceable fixed expenses: Advertising 785,000 470,000 315,000 Selling and administrative 614,000 380,000 234,000 Depreciation 263,000 132,000 131,000 Total traceable fixed 1,662,000 982,000 680,000 expenses Divisional segment 828,300 R 588,000 R 240,300 margin Common fixed expenses Operating income 407,000 R 421,300