accounting intern was asked to prepare segmented income statements that the company's divisional managers could use to calculate their break-even points and make decisions. She took the prior month's companywide income statement and prepared the absorption format segmented income statement shown below. Total 02:50:31 Sales cost of goods sold Gross margin Selling and administrative expenses Het operating Income Company $ 780,000 517.400 262,600 248,000 $ 14,600 Commercial Residential $ 260,000 $ 520,000 143,000 374,400 117,000 145,600 100,000 140.000 $9,000 $ 5,600 H In preparing these statements, the intern determined that Towaway's only variable selling and administrative expense is a 10% sales commission on ail sales. The company's total fixed expenses include $84,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $54,000 of fixed expenses that would disapplar if the Commercial segment is dropped, and $32,000 of fixed expenses that would disappear if the Residential segment is dropped : Do you agree with the intern's decision to use an absorption format for her segmented income statement? 3. 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, cost of goods sold, or gross margin? 3 Do you agree with the intern's decision to locate 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 dolar 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 $13,000 and $26,000, 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. R1 Rog 2 ter 28 Res Reg Compute the company ide break even point in collar sales (Round intermediate calculation to decimal acts and final answer to the nearest whole ar amount Ro their break-even points and make decisions. She took the prior month's companywide income statement and prepared the absorption format segmented income statement shown below. Sales Coat of goods sold Gross margin Selling and administrative expenses Net operating income Total Company $ 780,000 517.400 262,600 248,000 $ 14,600 Commercial Residential $ 260,000 $ 520,000 143,000 374,400 117,000 145,600 108,000 140,000 $9,000 $ 5,600 In preparing these statements, the intern determined that Towaway's only variable selling and administrative expense is a 10% sales commission on all sales. The company's total fixed expenses include $84,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $54,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $32,000 of fixed expenses that would disappear 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 (d) 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 $13,000 and $26,000, 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. Reg1 Req 2A Reg 20 Req3 Reg 4 Req5 Reg 6 Req 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 hinal answer to the nearest whole dollar amount.) Commercial Division Residential Division Break-even point ( Req5 Reg7 > Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Total Company $ 780,000 517,400 262,600 248,000 $ 14,600 Commercial Residential $ 260,000 $ 520,000 143,000 374,400 117,000 145,600 108,000 140,000 $ 9,000 $ 5,600 n 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 $84,000 of common fixed expenses that would continue to be ancurred even if the Commercial or Residential segments are discontinued, $54,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $32,000 of fixed expenses that would disappear 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 $13,000 and $26,000, 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. Req1 Req 2A Reg 28 Reg 3 Reg 4 Reg 5 Reg 6 Req 7 Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a to al monthly salary of $13,000 and $26,000, 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.) Show less Commercial Residential Division Division Break even point