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Specialty Footwear Stores Revenue Sole inserts $ 172165 i $ Heel inserts 1522200 i Total revenue $ 1694365 i Less : variable expenses Sole inserts

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Specialty Footwear Stores Revenue Sole inserts $ 172165 i $ Heel inserts 1522200 i Total revenue $ 1694365 i Less : variable expenses Sole inserts 108150 i Heel inserts 1209600 i Total variable expenses 1317750 i Contribution margin 376615 Traceable fixed expenses Segmented margin $ Common fixed expenses Operating income Drug Stores Total Shoe Shock 319735 i 491900 i 1014800 i 2537000 i $ 1334535 $ 3028900 i 200850 309000 i 806400 2016000 i 1007250 2325000 i 327285 703900 $ $ 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 $491,900 309,000 Sales revenue Less variable expenses Contribution margin Less traceable fixed expenses Segment margin Common fixed costs Net operating income Heel Inserts Division $2,537,000 2,016,000 521,000 349,200 $171,800 182,900 122,200 $60,700 Total Shoe Shock $3,028,900 2,325,000 703,900 471,400 232,500 171,600 $60,900 Helen Martin is Shoe Shock's sales manager. Although this statement provides useful information, Helen 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

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