Segment Contribution Margin Analysis The Walt Disney Company (DIS) is a global entertainment company that is organized into four business segments as follows: Media Networks: Television production and distribution, including ABC television network, ESPN, National Geographic. Parks, Experiences, and Products: Theme parks and resorts, including Walt Disney World and Disneyland; Experiences, including Disney Cruise Line and Disney Vacation Club; Products, including Disney and Pixar characters, comic books, and magazines. Studio Entertainment: Music and motion picture production and distribution, including Twentieth Century Studios, Marvel, and Lucasfilm. Direct-to-Consumer & International: Streaming services, including Disney+, ESPN+, and Hulu. For a recent year, Disney reported the following segment results (in millions): Segment Segment Media Networks Parks, Experiences, and Products Direct-to Segment Entertainment Consumer & International Revenues $28,393 Operating expenses i (19,371) $16,502 (16,583) $9,636 $16,967 (7,135) (19,773) Operating income $9,022 $(81) $2,501 $(2,806) Assume the following percentages of total operating expenses for each segment are variable; Percentage of Variable Segment Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International Variable Operating Expenses 75% 60% 80% 70% a. Prepare a variable costing income statement for The Walt Disney Company by segment. Round all amounts to the nearest million. Line Item Description. The Walt Disney Company Variable Costing Income Statement Media Networks (in millions). Parks, Experiences, Studio Direct-to-Consumer & and Products Entertainment International Sales 28,393 16,502 9,636 V 16,967 Variable operating expenses 5,708 Contribution margin 3,928 V Fixed operating expenses Operating income/loss 1,427 2,501 b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Media Networks Parks, Experiences, and Products Studio Entertainment 1 Direct-to-Consumer & International Contribution Margin Ratio % % % % c. Based on your answers to (a) and (b), interpret the segment performance. All segments generated a positive the Parks, Experiences, and Products segment generated more International segment generated the lowest adversely affected the preceding results. Thus, the preceding results are not indicative contribution margin, even though the Parks, Experiences, and Products and Direct-to-Consumer & International segments generated operating losses The Media Networks segment generated the highest contribution margin and contribution margin ratio. The Parks, Experiences, and Products and Studio Entertainment segments generated approximately the same contribution margin ratios. However, because of its size, contribution margin than the Studio Entertainment segment. The Direct-to-Consumer & contribution margin ratio and lowest contribution margin. The recent COVID-19 pandemic The Parks, Experiences, and Products and Studio Entertainment segments were particularly of Disney's normal operations for these segments. affected