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The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow, Each segment includes-a number of businesses, examples
The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow, Each segment includes-a number of businesses, examples of which are indicated in parentheses. Assume that the variable costs as a.percent of sales for each segment are as follows: a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689 ). Round contribution margin ratio to whole percents for each segment from the information given. Assume that the variable costs as a percent of sales for each segment are as follows: a. Determine the contrbution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689 ). Round contribution margin ratio to whole percents for each segment from the information given. b. Does your answer to (a) mean that the other segments are more profitable businesses? The higher contribution margin ratio of a segment should not be interpreted as being the pronitable segment. If the volume of business is not sulficient to exceed the break-even point, then the segments would be In the final analysis, the foxed costs also should be considered in determining the overall profitability af the segments. The; shows how sensitive the profit will be to changes in volume
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