Severo SA of Sao Paulo, Brazil, is organized into two divisions. The company's contribution formet segmented income statement in terms of the Brazilian currency, the real, R) for last month is given below Divisions Total Company Cloth Leather Sales Variable expenses R3.995,000 R2.350,000 R1645.000 1,955,000 1,030,000 925,000 Contribution margin 2,040,000 1,320,000 720,000 Traceable fixed expenses Advertising 600,000 370,000 230,000 Selling and 504,000 administrative Depreciation 243,000 122,000 280,000 224,000 121,000 Total traceable fixed 1,347,000 772,000 575,000 expenses Divisional segment margin Common fixed expenses Operating income 690,000 R 548,000 R 145,000 397,000 R 296,000 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