please provide answer with compulsory explanation , computation for each parts , steps clearly and completely answer in text form Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented incomestatement (in terms of the Brazilian currency, the real, R) for last month is given below.DivisionsLeatherClothR2,700,000 R1,890,0001,130,000 969,7001,570,000 920,300TotalCompanySalesR4,590,000Variable expenses2,099,700Contribution margin2,490,300785,000470,000 315,000614,000380,000 234,000263,000 132,000 131,000Total traceable fixed1,662,000982,000 680,000Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the productines.Required:1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined asproduct lines.Traceable fixedexpenses:AdvertisingSelling andadministrativeDepreciationexpensesDivisional segment828,300 R 588,000 R 240,300marginCommon fixed expenses407,000R 421,300Operating incomeTop management can't understand why the Leather Division has such a low segment margin when its sales are only30% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that theLeather Division be further segmented into product lines. The following information is available on the product lines inthe Leather Division:SalesVariable expensesContribution marginTraceable fixed expenses:AdvertisingSelling & administrativeDepreciationTotal traceable fixed expensesDivisional segment marginCommon fixed expenses:DepreciationProduct line segment marginProduct LineLeatherDivisionGarments Shoes Handbag°°이0ORORR이SalesTraceable fixed expenses:AdvertisingSelling and administrativeDepreciationVariable expenses as a percentageof salesR670,000ShoesR800,000Leather Division Product LinesGarmentsHandbagsR420,000R 97,000R 84,000R134,000R 47,000R 52,000R 36,000R 73,00065%40%R 60,000R 22,00051%

Income statement:The income statement is the statement or the record that is prepared by the company…

vero S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income atement in terms of the Brazilian currency, the real, R) for last month is given below Divisions Leather Cloth R2,700,000 R1,890,000 1,130,000 969,700 Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product nes. Required: 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Total Company Sales R4,590,000 Wariable expenses 2,099,700 Contribution margin 2,490,300 1,570,000 920,300 Traceable fixed Selling and expenses: Advertising administrative Depreciation expenses 785,000 470,000 315,000 614,000 380,000 234,000 263,000 132,000 131,000 Total traceable fixed 1,662,000 982,000 680,000 Divisional segment margin 828,300 R 588,000 R 240,300 Common fixed expenses 407,000 R 421,300 Operating income p management can't understand why the Leather Division has such a low segment margin when its sales are only % less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the ather Division be further segmented into product lines. The following information is available on the product lines in Leather Division: Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Wariable expenses as a percentage of sales Leather Division Product Lines Shoes R800,000 Garments R670,000 R 97,000 R 84,000 R 47,000 R 52,000 R 36,000 R 73,000 65% Handbags R420,000 R134,000 R 60,000 R 22,000 40% 51% Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling & administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses: Depreciation Product line segment margin Product Line Leather Division Garments Shoes Handbag о 이 ° 이 OR OR

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q