10-26 Segment margin income statement (LO 2) Shoe Shock Innovations manu- factures athletic shoe inserts that...

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10-26 Segment margin income statement (LO 2) Shoe Shock Innovations manu- factures athletic shoe inserts that cushion the foo

Sole Inserts Division Heel Inserts Division Sales revenue Less variable expenses Contribution margin Less traceable fixed exp

Answer 1

Answer #1

Segmented Income Statement
	Speciality Footwear Stores	Drug Stores	Total
Sales Revenue	1,975,000	1,025,000	3,000,000
Less: Variable Expenses	1,560,000	740,000	2,300,000
Contribution Margin	415,000	285,000	700,000
Less: Traceable fixed expenses	322,500	290,250	612,750
Segment Margin	92,500	(5,250)	87,250
Less: Common Fixed Expenses			32,250
Net Operating Income			55,000


b.Drug store should be closed as it is making a loss

Answer 2

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