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 Gross margin Selling and administrative expenses Net operating income $1,020,000 669,800 350,200 312,000 $ 38,200 Commercial Residential $340,000 $ 680,000 180,200 489,600 159,800 190,400 140,000 172,000 $ 19,800 $ 18,400 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 $60,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $86,000 of fixed expenses that would be avoided if the Commericial segment is dropped, and $64,000 of fixed expenses that would be avoided if the Residential segment is dropped. 4. Redo the intern's segmented income statement using the contribution format. 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 $15,500 and $31,000, 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Reg 3 Reg 4 Req 5 Reg 6 Req 7 Redo the intern's segmented income statement using the contribution format. Toxaway Company Income Statement Total Company Commercial Residential Variable expenses: Total variable expenses Reg 1 Reg 2A Req 2B Reg 3 Reg 4 Req 5 Reg 6 Reg 7 Compute the companywide break-even point in dollar sales. (Round intermediate calculations to 3 decimal places and final answer to the nearest whole dollar amount.) Break-even point Req 1 Reg 2A Reg 2B Reg 3 Reg 4 Reg 5 Reas | Reg 6 Rego Req 7 Compute the break-even point in dollar sales for the Commercial Division and for the Residential Division. (Round CM ratio to 2 decimal places and final answer to the nearest whole dollar amount.) Commercial Division Residential Division Break-even point Reg 1 Reg 2A Reg 2B Req3 Reg 4 Reg 5 Reg 6 Reg 7 Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a total monthly salary of $15,500 and $31,000, 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. (Round CM ratio to 2 decimal places and final answers to the nearest whole dollar amount.) Show less Commercial Division Residential Division Break-even point
