Segment Analysis Winston Sylvester Corporation is a brokerage and financial service company. The company recently provided information about its major business segments as follows (in millions): Investor Services Institutional Services Revenues $2,440 $1,573 Income from operations 1,044 172 Depreciation 90 50 a. The segment serves the retail customer, you and me. These include brokerage, Internet, and mutual fund services. The segment includes the same services provided for financial institutions, such as banks, mutual fund managers, insurance companies, and pension plan administrators. b. Indicate whether the following costs are a Variable Cost or a Fixed Cost in the Investor Servicessegment. 1. Commissions to brokers. 2. Fees paid to exchanges for executing trades. 3. Depreciation on brokerage offices. 4. Transaction fees incurred by Schwab mutual funds to purchase and sell shares. 5. Property taxes on brokerage offices. 6. Advertising. 7. Depreciation on brokerage office equipment, such as computers and computer networks. c. Estimate the contribution margin for each segment, assuming depreciation represents the majority of fixed costs. Investor Services (in millions) Institutional Services (in millions) Estimated contribution margin $ $ d. If Schwab decided to sell its Institutional Services accounts to another company, estimate how much operating income would decline under the following assumptions. Assume the fixed costs that serve institutional would not be sold but would be used by the other sector: $ million Assume the fixed assets were sold: $ million

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