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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,
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. Sales revenue Less variable expenses Contribution margin Less traceable fixed expenses Segment margin Common fixed costs Net operating income Sole Inserts Division $498,300 311.000 187,300 124,200 $63,100 Heel Inserts Division $2,523,000 2.036,000 487.000 349.700 $137.300 Total Shoe Shock $3,021,300 2.347.000 674.300 473.900 200,400 170,600 $29,800 Laura Hall is Shoe Shock's sales manager. Although this statement provides useful information, Laura wants to know how well the company's two distribution channels, specialty footwear stores and drug stores, are performing. Marketing data indicates that 35% of sole inserts and 60% of heel inserts are sold through specialty footwear stores. A recent analysis of corporate fixed costs revealed that 40% of all fixed costs are traceable to specialty footwear stores and 55% of all fixed costs to drug stores. Specialty Footwear Stores Revenue Sole Inserts $ Heclinserts $ Total revenue Less variable expenses Sole inserts Heel inserts Total variable expenses 1330.450 Contribution margin 357.755 257.800 Traceable fixed expenses $ 99,955 Segmented margin
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