Based on a review of the interns segmented income statement.

1. How much of the companys common fixed expenses did she allocate to the Commercial and Residential segments?

2. Redo the interns segmented income statement using the contribution format.

3. Compute the break-even point in dollar sales for the Commercial Division and for the Residential Division.

4. Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a total monthly salary of $23,000 and $46,000, 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.

Toxaway Company Is a merchandiser that segments its business Into two divislons-Commerclal and Resldential. The company's accounting Intern was asked to prepare segmented Income statements that the company's divislonal managers could use to calculate thelr break-even polnts and make decisions. She took the prior month's companywide Income statement and prepared the absorption format segmented Income statement shown below Total Company Commercial Residential Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $ 93e,80e 31e,808 628,888 17,500 52,600 167,488 16e,888 $ 18,988 11,5ee7,488 623,188 386,98e 288,888 139,588 128,888 In preparing these statements, the intern determined that Toxaway's only variable selling and administrative expense is a 10% sales commisslon on all sales. The company's total fixed expenses Include $69,000 of common fixed expenses that would continue to be Incurred even if the Commerclal or Residential segments are discontinued, $74,000 of fixed expenses that would be avolded If the Commericial segment is dropped, and $52,000 of fixed expenses that would be avolded if the Resldential segment is dropped