Shoe Shock Innovations manufactures athletic shoe inserts that cushion the foot and reduce the impact of exercise on the joints. The company has two divisions, Sole Inserts and Heel Inserts. A segmented income statement from last month follows.

Sole Inserts Division	Heel Inserts Division	Total Shoe Shock
Revenue	$494,700	$2,505,000	$2,999,700
Less variable expenses	318,000	2,018,000	2,336,000
Contribution margin	176,700	487,000	663,700
Less traceable fixed expenses	124,700	349,700	474,400
Segment margin	$52,000	$137,300	189,300
Common fixed costs	173,200
Net operating income	$16,100

Chris Kelly is Shoe Shocks sales manager. Although this statement provides useful information, Chris wants to know how well the companys two distribution channels, specialty footwear stores and drug stores, are performing. Marketing data indicates that 20% of sole inserts and 75% of heel inserts are sold through specialty footwear stores. A recent analysis of corporate fixed costs revealed that 50% of all fixed costs are traceable to specialty footwear stores and 45% of all fixed costs to drug stores. Warning

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(a) Prepare a segment margin income statement for Shoe Shocks two distribution channels. (If the amount is negative then enter with a negative sign preceding the number e.g. -5,125 or parenthesis. e.g. (5,125).)

Specialty Footwear Stores	Drug Stores	Total Shoe Shock
Common fixed expensesTraceable fixed expensesContribution marginVariable expensesOperating incomeHeel insertsSegment marginRevenueSole insertsTotal revenueTotal variable expenses
Common fixed expensesTotal revenueHeel insertsVariable expensesTotal variable expensesContribution marginOperating incomeRevenueTraceable fixed expensesSegment marginSole inserts	$	$	$
Total variable expensesTraceable fixed expensesSegment marginRevenueTotal revenueVariable expensesCommon fixed expensesOperating incomeContribution marginSole insertsHeel inserts
RevenueCommon fixed expensesTotal revenueTraceable fixed expensesOperating incomeSole insertsHeel insertsSegment marginVariable expensesTotal variable expensesContribution margin	$	$	$
LessAdd: contribution marginoperating incomerevenuecommon fixed expensestotal variable expensessegment margintraceable fixed expensessole insertsheel insertstotal revenuevariable expenses
Variable expensesRevenueCommon fixed expensesHeel insertsContribution marginTotal revenueTraceable fixed expensesSole insertsTotal variable expensesSegment marginOperating income
Common fixed expensesVariable expensesOperating incomeTotal variable expensesRevenueSegment marginSole insertsContribution marginHeel insertsTotal revenueTraceable fixed expenses
Common fixed expensesContribution marginOperating incomeTraceable fixed expensesSegmented marginRevenueSole insertsHeel insertsTotal revenueVariable expensesTotal variable expenses
Contribution marginTraceable fixed expensesSegmented marginCommon fixed expensesSole insertsRevenueHeel insertsTotal variable expensesTotal revenueVariable expensesOperating income
Heel insertsTotal variable expensesTotal revenueOperating incomeVariable expensesRevenueCommon fixed expensesContribution marginSole insertsTraceable fixed expensesSegmented margin
Total variable expensesContribution marginSole insertsRevenueVariable expensesOperating incomeHeel insertsTotal revenueTraceable fixed expensesSegmented marginCommon fixed expenses	$	$
Contribution marginTotal variable expensesCommon fixed expensesTraceable fixed expensesSegmented marginOperating incomeRevenueSole insertsHeel insertsTotal revenueVariable expenses
Total variable expensesOperating incomeCommon fixed expensesRevenueTotal revenueContribution marginSegmented marginTraceable fixed expensesSole insertsHeel insertsVariable expenses	$

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