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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

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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 5. Compute the companywide break-even point in dollar 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 $12,500 and $25,000, 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

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