Google LLC has two segments, Advertising and Cloud. The following data is provided for 2023:
•Advertising: Sales $800,000, Variable Costs $400,000, Fixed Costs $150,000
•Cloud: Sales $500,000, Variable Costs $300,000, Fixed Costs $100,000
Required:
1.Prepare a segmented income statement.
2.Calculate the contribution margin for each segment.
3.Analyze the profitability of each segment and suggest improvements.