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: Sales Cost of goods sold Total Company $1.035,000 676,200 Commercial $345,000 179,400 Residential $690.000 496,800 358,800 316,000 165,600 142.000 193,200 174,000 Gross margin Selling and administrative expenses Net operating income $ 42,800 $ 23,600 $ 19,200 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 $58,500 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $66,000 of fixed expenses that would be avoided if the Residential segment is dropped, and $88,000 of fixed expenses that would be avoided if the Commercial segment is dropped. Required: 1. Do you agree with the intern's decision to use an absorption format for her segmented income statement? Yes No 2-a. Based on the intern's segmented income statement, can you determine how she allocated the company's common fixed expenses to the Commercial and Residential segments? Answer is complete but not entirely correct. Commercial Residential Common fixed expenses $ 26,288 $ 32,212 2-b. Do you agree with her decision to allocate the common fixed expenses to the Commercial and Residential segments? Yes No 3. Redo the intern's segmented income statement using the contribution format. Answer is not comes 2-b. Do you agree with her decision to allocate the common fixed expenses to the Commercial and Residential segments? Yes No 3. Redo the intern's segmented income statement using the contribution format X Answer is not complete. Toxaway Company Income Statement Total Company $ 1,035,000 Commercial Residential $ 345,000 $ 690,000 Sales Variable expenses: Cost of goods sold Selling expenses Depreciation of sales facilities Total variable expenses Contribution margin 676.200 103,500 179,400 34,500 496,800 69,000 x 213.900 131,100 565,800 124,200 779,700 255,300 58,500 196,800 Other expenses x s 131,100 $ 124,200 $ 196,800 4. 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.) Answer is complete but not entirely correct. Break-even $ point 861,486