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502 CHAPTER Decide whether to discontinue a department (Leaning o becan es a comtimmattion of the Caesars Entertainment Corporatneciv aninsion serial casa the tsae page
502 CHAPTER Decide whether to discontinue a department (Leaning o becan es a comtimmattion of the Caesars Entertainment Corporatneciv aninsion serial casa the tsae page 43) for Serial Case rd (The components of the Caesars serial cas3 n any order) nue En ter. Rofer to the introductory story in Chapter 1 (se are the income statements for Caesars Entertainr This case Corporation fo the three Pears ending December 31. 2012 through 2014 Consolidated Statements of Operations (Condensed and adagt Years ended December Caesars Entertainment Corporation In millions, except per share date 2013 2012 2014 $ 5,529 1,451 1,167 $ 5,418 1,522 1,207 $5,916 1,438 1,147 73 (315 $ 8,186 Revenues Casino revenue Food and beverage revenue Rooms revenue Other revenues s 8,516s 8,220 Net revenues Operating Expenses $3,368 $ 3,253 Direct casino expenses Direct food and beverage 639 296 694 634 289 Direct rooms expenses Miscellaneous expenses 4.706 $8.68 510.246 $8.052 8.761 Total operating expenses Income/(loss) from operations Requirements: Note: To answer these questions, calculate a segment margin for each of the ments. For the purpose of this case only, calculate segment margin par expenses. (We are modifying the concept of segment margin slight rect ormation that is publicly available. We are essentially assuming that the direcveth are the variable expenses.) here, given the direct expenses Using the statements of operations (income statements) given, answer the follow questions following 1. Calculate the segment margin for the three departments: Casinos, Food an age, and Rooms 2. Given the segment margins that you calculated, should Caesars discontinue the three departments? Why or why not? any of 3. What expenses are likely to be included in "Miscellaneous expenses"? expenses be allocated to the three departments if Caesars is evaluating whether should discontinue any departments? Why or why not
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