SPCOM100 Lecture Notes - Lecture 1: Earnings Before Interest And Taxes, Accounts Payable, Gross Margin

• School: University of Waterloo
• Department: Speech Communication
• Course: SPCOM100
• Professor: Karen Lazar

Document Summary

Toxaway company is a merchandiser that segments its business into two divisions commercial and. 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. Why: 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. Why: redo the intern"s segmented income statement using the contribution format, compute the companywide break-even point in dollar sales, compute the break-even point in dollar sales for the commercial division and for the residential. Division: assume the company decided to pay its sales representatives in the commercial and residential.