In preparing these statements, the intern determined that Toxaways only variable selling and administrative expense is a 10% sales commission on all sales. The companys total fixed expenses include $72,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $38,000 of fixed expenses that would be avoided if the Residential segment is dropped, and $55,000 of fixed expenses that would be avoided if the Commericial segment is dropped.

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

2.

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.)

5.

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.)

6.

Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a total monthly salary of $15,000 and $30,000, 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 answer to the nearest whole dollar amount.)

	Total Company			Commercial			Residential
Sales	$	750,000		$	250,000		$	500,000
Cost of goods sold		500,000			140,000			360,000
Gross margin		250,000			110,000			140,000
Selling and administrative expenses		240,000			104,000			136,000
Net operating income	$	10,000		$	6,000		$	4,000