Question #3 (of 5) value 25.00 points Toxaway Company is a merchandiser that segments its business into two divisionsCommercial 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 Company Commercial Residen Sales Cost of goods sold $870,000 S 290,000 $580,000 571,300 153,700 417,600 Gross margin 298,700 136,300 162,400 Selling and administrative expenses 272,000 120,000 152,000 Net operating income S 26,700 16,300 10,400 In preparing these statements, the intern determined that Toxaway's only varlable seling and administrative expense is a 10% sales commission on all sales. The company's total fixed expenses nclude $T5,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are disconfinued, $44,000 of fixed expenses that would be avoided if the Residential segment is dropped, and $66,000 of fixed expenses that would be avoided if the Commericial segment is dropped Required: 1. Do you agree with the intem's decision to use an absorption format for her segmented income statement? Yes ONo 02