Toxaway Company Is a merchandiser with two divisions-Commerclal and Residential. The company's accounting Intern was asked to prepare segmented income statements the company's divisional managers could use to calculate thelr break-even polnts and make decisions. She took the prior month's companywide income statement and prepared the absorption format segmented income statement shown below: In preparing these statements, the Intern determined Toxaway's only varlable selling and administrative expense is a 10% sales commission on all sales. The company's total fixed expenses include $66,000 of common fixed expenses that will continue even if the Commerclal or Residentlal segment is discontinued, $78,000 of fixed expenses that will disappear if the Commerclal segment is dropped, and $56,000 of fixed expenses that will disappear if the Residential segment is dropped. Required: 1. Do you agree with the intern's decision to use an absorption format for her segmented Income statement? 2. Based on a review of the Intern's segmented Income statement. a. How much of the company's common fixed expenses did she allocate to the Commerclal and Residentlal segments? b. Which of the following three allocation bases did she most likely used to allocate common fixed expenses to the Commerclal and Residentlal segments: (a) sales, (b) cost of goods sold, or (c) gross margin? 3. Do you agree with the Intern's decision to allocate common fixed expenses to the Commerclal and Residentlal segments? 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 representatlves in the Commerclal and Residentlal Divisions a total monthly salary of $25,000 and $50,000, respectlvely, 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 Residentlal Division. Complete this question by entering your answers in the tabs below. Do you agree with the intern's decision to use an absorption format for her segmented income statement