Segment Contribution Margin Analysis The operating revenues

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 businesses, examples of which are indicated in parentheses Time Warner, Inc. Seqment Revenues (in millions) Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Assume that the variable costs as a percent of sales for each segment are as fellows: $55,100 62,800 Home Box Office Warner Bros. a Determine the contribution margin and contribution margin ratio for each segment from the information given. Round contribution margin ratio to whole percents for each segment from the information given. Enter all amounts as positive numbers. Turner Home Box Office Warner Bros. Revenues Varlable costs Contribution margin Contribution margin ratio (as a percent) 3%

Solution

Turner Home Box Office Warner Bros. Revenues $55,100 $62,800 $86,800 Variable costs $20,387 $27,632 $46,004 Contribution margin $34,713 $35,168 $40,796 Contribution margin ratio(as a percent) 63% 56% 47%