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 Company Sales Cost of goods sold, Gross margin Selling and administrative expenses Net operating income Commercial Residential $ 1,050,000 $ 350,000 $700,000 682,500 178,500 367,500 320,000 171,500 144,000 504,000 196,000 176,000 $ 47,500 $ 27,500 $ 20,000 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 $57,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $90,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $68,000 of fixed expenses that would disappear if the Residential segment is dropped. 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 Company Sales Cost of goods sold, Gross margin Selling and administrative expenses Net operating income Commercial Residential $ 1,050,000 $ 350,000 $700,000 682,500 178,500 367,500 320,000 171,500 144,000 504,000 196,000 176,000 $ 47,500 $ 27,500 $ 20,000 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 $57,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $90,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $68,000 of fixed expenses that would disappear if the Residential segment is dropped.