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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.

Sole Inserts Division

Heel Inserts Division

Total Shoe Shock

Sales revenue

$494,900 $2,548,000 $3,042,900

Less variable expenses

319,000 2,011,000 2,330,000

Contribution margin

175,900 537,000 712,900

Less traceable fixed expenses

123,000 348,700 471,700

Segment margin

$52,900 $188,300 241,200

Common fixed costs

170,300

Net operating income

$70,900

Susan Wilson is Shoe Shocks sales manager. Although this statement provides useful information, Susan wants to know how well the companys 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.

Prepare a segment margin income statement for Shoe Shocks two distribution channels. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Revenue :

Sole inserts :

Heel inserts :

Total revenue :

Less Variable Expenses :

Sole inserts :

Heel inserts:

Total Variable Expenses :

Contribution Margin :

Traceable Fixed Expenses :

Segmented Margin:

Common Fixed Expenses :

Operating Income:

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