Question

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	$497,000		$2,544,000		$3,041,000
Less variable expenses	300,000		2,036,000		2,336,000
Contribution margin	197,000		508,000		705,000
Less traceable fixed expenses	120,400		349,200		469,600
Segment margin	$76,600		$158,800		235,400
Common fixed costs					172,900
Net operating income					$62,500

Chris Kelly is Shoe Shock’s sales manager. Although this statement provides useful information, Chris wants to know how well the company’s 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.

Prepare a segment margin income statement for Shoe Shock’s two distribution channels. (

Specialty Footwear StoresDrug StoresTotal Shoe ShockSelect an opening name for section oneSelect an opening name for section oneSelect an opening name for section one                                                                      Common fixed expensesRevenueTotal revenueVariable expensesContribution marginHeel insertsTotal variable expensesTraceable fixed expensesOperating incomeSole insertsSegment marginSelect an income statement itemSelect an income statement itemSelect an income statement item                                                                      Total revenueCommon fixed expensesSole insertsVariable expensesSegment marginTraceable fixed expensesRevenueContribution marginOperating incomeTotal variable expensesHeel inserts$Enter a dollar amountEnter a dollar amountEnter a dollar amount $Enter a dollar amountEnter a dollar amountEnter a dollar amount $Enter a dollar amountEnter a dollar amountEnter a dollar amount Select an income statement itemSelect an income statement itemSelect an income statement item                                                                      Segment marginHeel insertsTotal variable expensesSole insertsTraceable fixed expensesRevenueVariable expensesOperating incomeContribution marginCommon fixed expensesTotal revenueEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountSelect a closing name for section one Select a closing name for section one Select a closing name for section one                                                                       Operating incomeContribution marginSegment marginSole insertsTraceable fixed expensesHeel insertsRevenueTotal revenueTotal variable expensesVariable expensesCommon fixed expenses$Enter a total amount for section oneEnter a total amount for section oneEnter a total amount for section one $Enter a total amount for section oneEnter a total amount for section oneEnter a total amount for section one $Enter a total amount for section oneEnter a total amount for section oneEnter a total amount for section one Select between addition and deductionSelect between addition and deductionSelect between addition and deduction                                                                      AddLess: Select an opening name for section twoSelect an opening name for section twoSelect an opening name for section two                                                                      variable expensestotal variable expensestraceable fixed expensessole insertscontribution marginsegment marginheel insertstotal revenuerevenueoperating incomecommon fixed expensesSelect an income statement itemSelect an income statement itemSelect an income statement item                                                                      Segment marginOperating incomeContribution marginVariable expensesTotal variable expensesRevenueTraceable fixed expensesHeel insertsSole insertsTotal revenueCommon fixed expensesEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountSelect an income statement itemSelect an income statement itemSelect an income statement item                                                                      Sole insertsHeel insertsRevenueCommon fixed expensesVariable expensesContribution marginTraceable fixed expensesTotal revenueSegment marginTotal variable expensesOperating incomeEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountSelect a closing name for section twoSelect a closing name for section twoSelect a closing name for section two                                                                      Operating incomeTraceable fixed expensesRevenueTotal revenueSegmented marginVariable expensesHeel insertsCommon fixed expensesContribution marginTotal variable expensesSole insertsEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoEnter a total amount for section twoSelect a summarizing line for the first partSelect a summarizing line for the first partSelect a summarizing line for the first part                                                                      Sole insertsOperating incomeHeel insertsSegmented marginRevenueContribution marginVariable expensesTotal variable expensesCommon fixed expensesTotal revenueTraceable fixed expensesEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partEnter a total amount for the first partSelect an income statement itemSelect an income statement itemSelect an income statement item                                                                      RevenueTotal variable expensesContribution marginHeel insertsCommon fixed expensesSegmented marginTraceable fixed expensesOperating incomeTotal revenueVariable expensesSole insertsEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountEnter a dollar amountSelect a summarizing line for the second partSelect a summarizing line for the second partSelect a summarizing line for the second part                                                                      Segmented marginVariable expensesTraceable fixed expensesContribution marginSole insertsOperating incomeHeel insertsCommon fixed expensesTotal revenueTotal variable expensesRevenue$Enter a total amount for the second partEnter a total amount for the second partEnter a total amount for the second part $Enter a total amount for the second partEnter a total amount for the second partEnter a total amount for the second part Enter a total amount for the second partEnter a total amount for the second partEnter a total amount for the second partSelect an income statement itemSelect an income statement itemSelect an income statement item                                                                      Total variable expensesSole insertsTotal revenueContribution marginOperating incomeSegmented marginRevenueVariable expensesHeel insertsTraceable fixed expensesCommon fixed expensesEnter a dollar amountEnter a dollar amountEnter a dollar amountSelect a closing name for this statementSelect a closing name for this statementSelect a closing name for this statement                                                                      Total variable expensesVariable expensesTraceable fixed expensesTotal revenueSegmented marginRevenueOperating incomeContribution marginSole insertsCommon fixed expensesHeel inserts$Enter a total amount for this statementEnter a total amount for this statementEnter a total amount for this statement

Answer 1