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):

Line Item Description	Segment Media Networks	Segment Parks, Experiences, and Products	Segment Entertainment	Direct-to-Consumer & International
Revenues	$28,393	$16,502	$9,636	$16,967
Operating expenses	(19,200)	(16,600)	(7,200)	(19,700)
Operating income	$9,193	$(98)	$2,436	$(2,733)

Assume the following percentages of total operating expenses for each segment are variable:

Segment	Percentage of Variable Operating Expenses
Media Networks	75%
Parks, Experiences, and Products	60%
Studio Entertainment	80%
Direct-to-Consumer & International	70%

Question Content Area

a. Prepare a variable costing income statement for The Walt Disney Company by segment. If required, use a minus sign to indicate an operating loss. Round all amounts to the nearest million.

Line Item Description	Media Networks	Parks, Experiences, and Products	Studio Entertainment	Direct-to-Consumer & International
Contribution marginManufacturing marginSalesVariable cost of goods soldVariable commission expense	$- Select -	$- Select -	$- Select -	$- Select -
Contribution marginManufacturing marginSalesVariable cost of goods soldVariable operating expenses	- Select -	- Select -	- Select -	- Select -
Contribution marginManufacturing marginFixed operating expensesSalesVariable commission expense	$- Select -	$- Select -	$- Select -	$- Select -
Contribution marginManufacturing marginSalesFixed operating expensesVariable commission expense	- Select -	- Select -	- Select -	- Select -
Operating income/loss	$Operating income/loss	$Operating income/loss	$Operating income/loss	$Operating income/loss

Question Content Area

b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent.

Segment	Contribution Margin Ratio
Media Networks	fill in the blank 1 of 4%
Parks, Experiences, and Products	fill in the blank 2 of 4%
Studio Entertainment	fill in the blank 3 of 4%
Direct-to-Consumer & International	fill in the blank 4 of 4%