1. Do you agree with the interns decision to use an absorption format for her segmented income statement?

Yes or No

2. Based on a review of the interns segmented income statement, how much of the companys common fixed expenses did she allocate to the Commercial and Residential segments?

a. Common fixed expenses commercial

b. Common fixed expenses residential

3. Based on a review of the interns segmented income statement, which of the following three allocation bases did she most likely used to allocate common fixed expenses to the Commercial and Residential segments?

Multiple choice

A sales

B cost of goods sold

C gross margin

4 Do you agree with the interns decision to allocate the common fixed expenses to the Commercial and Residential segments?

Yes or No

5. Redo the interns segmented income statement using the contribution format.? (Req 4 attached photo)

6. Compute the companywide break-even point in dollar sales. (Round intermediate calculations to 3 decimal places and final answer to the nearest whole dollar amount.)

Break even point =

7. Compute the break-even point in dollar sales for the Commercial Division and for the Residential Division. (Round CM ratio to 2 decimal places and final answer to the nearest whole dollar amount.)

a. Break even point for commercial division =

b. Break even point for residential division =

8. Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a total monthly salary of $16,500 and $33,000, respectively, and to lower its companywide sales commission percentage from 10% to 5%. Calculate the new break-even point in dollar sales for the Commercial Division and the Residential Division. (Round CM ratio to 2 decimal places and final answers to the nearest whole dollar amount.)

a. Break even point for commercial division =

b. Break even point for residential division =

Total Company CommercialResidential $1,035,000 $345,000 $690,000 Sales Cost of goods sold Gross margin Selling and administrative expenses 676,200 179,400 496,800 358,800 165,600 193,200 316,000 142,000 174,000 23,600 Net operating income $ 42,800 19,200 In preparing these statements, the intern determined that Toxaway's only variable selling and administrative expense is a 10% sales commission on all sales. The company's total fixed expenses include $58,500 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $88,000 of fixed expenses that would be avoided if the Commericial segment is dropped, and $66,000 of fixed expenses that would be avoided if the Residential segment is dropped Required: 1. Do you agree with the intern's decision to use an absorption format for her segmented income statement? 2. Based on a review of the intern's segmented income statement. a. How much of the company's common fixed expenses did she allocate to the Commercial and Residential segments? b. Which of the following three allocation bases did she most likely used to allocate common fixed expenses to the Commercial and Residential segments: (a) sales, (b) cost of goods sold, or (c) gross margin? 3. Do you agree with the intern's decision to allocate the common fixed expenses to the Commercial and Residential segments? 4. Redo the intern's segmented income statement using the contribution format. 5. Compute the companywide break-even point in dollar sales 6. Compute the break-even point in dollar sales for the Commercial Division and for the Residential Division. 7. Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a total monthly salary of $16,500 and $33,000, respectively, and to lower its companywide sales commission percentage from 10% to 5%. Calculate the new break-even point in dollar sales for the Commercial Division and the Residential Division. Complete this question by entering your answers in the tabs below. Req 1Req 2A Req 2B Req 3 Req 4 Req 5 Req 6 Req 7 Redo the intern's segmented income statement using the contribution format. Toxaway Compan Income Statement Total Company Commercial Residential Variable expenses Total variable expenses K Req 3 Req 5 >