60.1K

Verified Solution

Link Copied!

Prepare a segment margin income statement for Shoe Shocks two distribution channels. (Information attached in following image)

Question:1 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 Less variable expenses Contribution margin Less traceable fixed expenses123,400 Segment margin Common fixed costs Net operating income $493,400 $2,538,000 $3,031,400 312,000 2,009,000 2,321,000 181,400 529,000 710,400 349,600 473,000 $179,400 237,400 171,800 65,600 $58,000 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 otwear 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 analy 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. ! (a) Prepare a segment margin income statement for Shoe Shock's two distribution channels.(If the amount is negative then enter with a negative sign preceding the number e.g.-5,125 or parenthesis, e.g.(5,125) Specialty Footwear Stores Drug Stores Total Shoe Shock

Answer & Explanation Solved by verified expert

See Answer