Done AA ezto.mheducation.com Homework_Chapter 6 A Saved Help Save & Exit Submit 0 You skipped this question in the previous attempt. Check my work 6 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income TULDU Company $ 780,000 517,400 262,600 248,000 $ 14,600 Commercial Residential $ 260,000 $ 520,000 143,000 374,400 117,000 145,600 108,000 140,000 $ 9,000 $ 5,600 10 points eBook Hint 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 $84,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $54,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $32,000 of fixed expenses that would disappear if the Residential segment is dropped. Print References 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 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 (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 $13,000 and $26,000, 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. Mc Graw Hill