Return to question 3 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: points Total Company Commercial Residentisl Sales ost of goods sold Gross margin Selling and administrative expenses Net operating income 975,000 325,000 65a,D0D 182,000481,000 169,DDD 166,DDD 663,000 312,000 300,000131,000 143, 000 $ 12,000 9,000 3,00t0 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 $64,500 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $80,000 of fixed expenses that would be avoided if the Commericial segment is dropped, and $58,000 of fixed expenses that would be avoided if the Residential segment is dropped