Toxaway Company is a merchandiser that segments its business into two divisionsCommercial and Residential. The companys accounting intern was asked to prepare segmented income statements that the companys divisional managers could use to calculate their break-even points and make decisions. She took the prior months companywide income statement and prepared the absorption format segmented income statement shown below:

	Total Company			Commercial			Residential
Sales	$	975,000		$	325,000		$	650,000
Cost of goods sold		663,000			182,000			481,000
Gross margin		312,000			143,000			169,000
Selling and administrative expenses		300,000			134,000			166,000
Net operating income	$	12,000		$	9,000		$	3,000

In preparing these statements, the intern determined that Toxaways only variable selling and administrative expense is a 10% sales commission on all sales. The companys 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, $58,000 of fixed expenses that would be avoided if the Residential segment is dropped, and $80,000 of fixed expenses that would be avoided if the Commericial segment is dropped.

Toxaway Company
Income Statement
	Total Company	Commercial	Residential
Sales	$975,000	$325,000	$650,000
Variable expenses:
Cost of goods sold	663,000	182,000	481,000
Sales commissions	97,500	32,500	65,000
Total variable expenses	760,500	214,500	546,000
Contribution margin	214,500	110,500	104,000
Traceable fixed expenses	138,000	80,000	58,000
Segment margin	76,500	$30,500	$46,000
Common fixed expenses	64,500
Net operating income	$12,000

QUESTION:

1. 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.)

	2. 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 answers to the nearest whole dollar amount.)

3. 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. (Round CM ratio to 2 decimal places and final answers to the nearest whole dollar amount.)