Segment Contribution Margin Analysis Amazon.com, Inc. (AMZN) organizes its operations into three segments: North America, International, and Amazon Web Services (AWS). The North America and International segments primarily report amounts earned from online consumer retail sales. The AWS segment offers a broad set of technology services, including computing, storage, database, analytics, and other cloud-based services. For a recent year, Amazon reported the following segment results (in millions): Sales Segment North America $236,282 Segment International Segment AWS Total $104,412 $45,370 $386,064 Operating expenses (227,631) (103,695) (31,839) (363,165) Operating income $8,651 $717 $13,531 $22,899 Assume the following percentages of total operating expenses for each segment are variable: Segment North American Percentage of Variable Operating Expenses 85% International AWS 80% 75% a. Prepare a variable costing income statement for Amazon.com by segment. Round all amounts to the nearest million. Amazon.com, Inc. Variable Costing Income Statement (in millions) a. Prepare a variable costing income statement for Amazon.com by segment. Round all amounts to the nearest million. Amazon.com, Inc. Variable Costing Income Statement (in millions) Line Item Description North America International AWS Total b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio North America. International AWS c. Based on your answers to (a) and (b), interpret the segment performance. The North America segment's contribution margin ratio is slightly, basa.contribution margin ratin be 4 than International's contribution margin ratio. In contrast, AWS than twice that of the North America and International sonments. These differences tefect the b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio North America International AWS % c. Based on your answers to (a) and (b), interpret the segment performance. The North America segment's contribution margin ratio is slightly U has a contribution margin ratio is than International's contribution margin ratio. In contrast, AWS than twice that of the North America and International segments. These differences reflect the underlying operations of each segment. The North America and International segments are based primarily upon consumer retail sales, which is competitive with operating margins. In contrast, AWS focuses on a broad set of technology services, which operating margins. In addition, Amazon.com was one of the first companies to focus on developing cloud-based technology services. However, Amazon.com is facing L competition in its AWS cloud-based services from companies such as allows for Microsoft (MSFT).