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. 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 $72,000 of common fixed expenses that would continue to be. incurred even if the Commercial or Residential segments are discontinued, $55,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $38,000 of fixed expenses that would disappear if the Residential segment is dropped 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 Commercial and Residential segments? b. Which of the following three allocation bases did she most likely used to allocate common fixed expenses to the Commercial and Residential segments: (a) sales, (b) cost of goods sold, or (c) gross margin? 3. Do you agree with the intern's decision to allocate the common fixed expenses to the Commercial and Residential 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 representatives in the Commercial and Residential Divisions a total monthly salary of $15,000 and $30,000, respectively, and to lower its companywide sales commission percentage from tos 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. Do you agree with the intern's decision to use an absorption format for her segmented income statement? Complete this question by entering your answers in the tabs below. Based on a review of the intern's segmented income statement, how much of the company's common fixed expenses did she allocate to the Commercial and Residential segments? Based on a review of the intern's segmented income statement, which of the following three allocation bases did she most likely used to allocate common fixed expenses to the Commercial and Residential segments? Sales Complete this question by entering your answers in the tabs below. Do you agree with the intem's decision to allocate the common fixed expenses to the Commercial and Residential segments? Redo the intern's segmented inc.

1. 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. 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 $72,000 of common fixed
expenses that would continue to be. incurred even if the Commercial or Residential segments are
discontinued, $55,000 of fixed expenses that would disappear if the Commercial segment is
dropped, and $38,000 of fixed expenses that would disappear if the Residential segment is
dropped
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 Commercial and Residential
segments? b. Which of the following three allocation bases did she most likely used to allocate

2. common fixed expenses to the Commercial and Residential segments: (a) sales, (b) cost of goods
sold, or (c) gross margin? 3. Do you agree with the intern's decision to allocate the common
fixed expenses to the Commercial and Residential 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 representatives in
the Commercial and Residential Divisions a total monthly salary of $15,000 and $30,000,
respectively, and to lower its companywide sales commission percentage from tos 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. Do you agree with the
intern's decision to use an absorption format for her segmented income statement?
Complete this question by entering your answers in the tabs below. Based on a review of the
intern's segmented income statement, how much of the company's common fixed expenses did
she allocate to the Commercial and Residential segments?
Based on a review of the intern's segmented income statement, which of the following three
allocation bases did she most likely used to allocate common fixed expenses to the Commercial
and Residential segments? Sales
Complete this question by entering your answers in the tabs below. Do you agree with the
intem's decision to allocate the common fixed expenses to the Commercial and Residential
segments?
Redo the intern's segmented income statement using the contribution format.
$15,000 and $30,000, 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.
Compute the companywide break-even point in dollar sales. Note: Round intermediate
calculations to 3 dedimal places and final answer to the nearest whole dollar amount.
Complete this question by entering your answers in the tabs below. Compute the break-even
point in dollar sales for the Commercial Division and for the Residential Division. Note: Round

3. CM ratio to 2 decimal places and final answers to the nearest whole dollar amount.
Assume the company decided to pay its sales representatives in the Commercial and Residential
Divisions a total monthly salary of $15,000 and $30,000, 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. Note: Round CM
ratio to 2 decimal places and final answers to the nearest whole dollar amount.