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Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes
Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of Business, samples of which are indicated in parenthe Time Warner, Inc. Segment Revenues in million) Turner (Cable networks and digital media) 145,300 Home Box Office pay television) 40,300 Warner Bros. (im, television and videos) 74,400 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 35 Home Box Orice 23 Warner tiron a. Determine the contribution margin and contrbution margin ratio for each sement from the information given when required, round to the nearest whole millionth (for example, round 5,688.7 to 5,69). Round contribution margin ratio to whole percents for each segment from the information given Turner Home Box Office Warner Bros. Reveves Variable co Contribution margin Contribution margin ratio as a percent) b. Does your answer to (a) mean that the sther segments are more profitable businesses? The higher contribution marginats of a segment should not be interpreted as being the profitable segment of the volume of BSPASS is not sufficient to exceed the best even point, then the segments would be In the final analysis, the forecasts also should be considered in determining the overall protity of the seats. The shows how best the probe to changes in volume
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