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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 $498,300 $2,523,000 $3,021,300 Less variable expenses 311,000 2,036,000 2,347,000 Contribution margin 187,300 487,000 674,300 Less traceable fixed expenses 124.200 349,700 473,900 Segment margin $63,100 $137,300 200,400 Common fixed costs 170,600 Net operating income $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. (a) Prepare a segment margin income statement for Shoe Shock's two distribution channels. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Specialty Footwear Stores a $ $ $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit
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