Problem 6-24 Companywide and Segment Break-Even Analysis, Decision Making [LO6-4, LO6-5] 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: Total Sales Cost of goods sold Company Commercial Residential $810,000 $270,000 $540,000 548,100 153,900 394,200 Gross margin Selling and administrative expenses 261,900 256,000 116,100 112,000 145,800 144,000 Net operating income $ 5,900 4,100$ 1,800 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 $81,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $36,000 of fixed expenses that would be avoided if the Residential segment is dropped and $58,000 of fixed expenses that would be avoided if the Commericial segment is dropped Required 1. Do you agree with the intern's decision to use an absorption format for her segmented income statement? es 0 2-a. Based on the intern's segmented income statement, can you determine how she allocated the company's common fixed expenses to the Commercial and Residential segments? mmercial Residential Common fixed expenses