The drop down options for questions 3 are:

Problem 6-24 Companywide and Segment Break-Even Analysis; Decision Making [LO6-4, LO6-5] 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: Total Commercial Residential Company $1,035,000 $345,000 $690,000 Sales Cost of goods sold 676,200 179,400 496,800 Gross margin Sel 358,800 165,600 316,000 193,200 174,000 ling and administrative expenses 142,000 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 Commericial segment is dropped