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Oracle Corporation has three segments: Cloud Services, Software Licensing, and Hardware. The following information is provided for 2023: Cloud Services: Sales $6,000,000, Variable Costs $3,000,000,

Oracle Corporation has three segments: Cloud Services, Software Licensing, and Hardware. The following information is provided for 2023:

  • Cloud Services: Sales $6,000,000, Variable Costs $3,000,000, Fixed Costs $1,500,000
  • Software Licensing: Sales $5,500,000, Variable Costs $2,800,000, Fixed Costs $1,400,000
  • Hardware: Sales $4,500,000, Variable Costs $2,200,000, Fixed Costs $1,100,000

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.
  4. Discuss the importance of segment reporting in financial analysis and decision-making.

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