Severo SA of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement on terms of the Brazilian currency, the real R) for last month is given below: Total Company R1,850,000 1,870,000 1,980,000 Divisions Cioth R2,200,000 1,050,00 1,150,000 Leather R 1,650,000 820,000 830,000 Sales Variable expenses Contribution natin Traceable fixed expenses Advertising Selling and administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses Operating income 692,000 $26,000 2447.000 1,465.000 515,000 399.000 R 116,00 390,000 300,000 124,000 314,000 336,000 302.000 226,000 120.000 651 000 179,000 R R Top management can't understand why the Leather Division has such a low segment margin when its sales are only 25% 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 Top management can't understand why the Leather Division has such a low segment margin when its sales are only 25% 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 2500,000 R800,000 R350,000 Traceable fixed expenses Advertising R 59,000 R121,000 R122,000 Selling and administrative R 39,000 R 44,000 R 60,000 Depreciation 28,000 M 65,000 R 30,000 Variable expenses as a percentage of sales 65% 40% 50% Analysis shows that R83,000 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. Product Line Shoes Leather Division Garments Handbags R R 0 0 0 0 Traceable fixed expenses Total traceable fixed expenses 0 0 0 0 OR OR DR 0 Common fixed expenses R 0