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, 080 ,000 R 2, 400, 900 R 1, 680, 606 Variable expenses 2, 033,608 1, 070,090 963, 606 Contribution margin 2, 047 , 600 1, 330, 090 717, 606 Traceable fixed expenses: Advertising 650, 060 410, 006 240, 606 Selling and administrative 548,060 326, 600 228, 090 Depreciation 261 , 600 126, 060 135, 909 Total traceable fixed expenses 1, 459, 600 856, 060 603, 906 Divisional segment margin 588, 900 R 474, 080 8 114,090 Common fixed expenses 401, 090 Operating income R 187,006Top 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 available on the product lines in the Leather Division: Leather Division Product Lines Garments Shoes Handbags Sales R510,060 R750, 060 R420, 060 Traceable fixed expenses: Advertising R 61, 060 R 84, 600 R 95, 006 Selling and administrative R 41, 006 R 46, 009 Depreciation R 30 , 606 R 67, 906 R 35, 060 Variable expenses as a percentage of sales 70%% 50% 15 5% Analysis shows that R71,000 of the Leather Division's selling and administrative expenses are common to the product lines.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 R211,000 or sales of the shoes product line by R156.000. The campaign would cost R41,000. a. Compute the increased operating income for these product lines for the expected increased sales Garments Shoes Increased operating income RI R b. Based on the above results, which product line should be chosen? Garments Shoes