eChegg . Get 24/7- GChegg . Get 247- G chegg . Get 24/7 a Jeremy Groves at- , Customer Support Atun fort 24. Homework Toxaway Company is a merchandiser that segments its business into two divisions-Commercial and Residential. The company's 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 $ 885,000 # 295,000 590.000 57,300-153'400-41,900 171,100 Cost of goods sold margin 312,700 4,600 Selling and adminiatrative expenses 276,000 Set operating ineone 36,700 19,600 17,100 In preparing these statements, the intern determined that Toxaway's only variable selling and edministrative expense is a 10% sales commission on all sales. The company's total fixed expenses include $73,500 ofcommon fixed expenses that would continue to be osincurred even if the Commercial or Residential segments are discontinued, $68,000 of fixed expenses that would be avoided if the Commericial segment is dropped, and $46,000 of fixed expenses that would be avoided if the Residential segment is dropped 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 alocate 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 dolar 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 $20,000 and S40,000, respectively, and to lower its companywide sales commission percentage from 10% to 5%. Calculate the new break -even point in dolliar sales for the Commercial Division and the Residential Division.