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. Segment Revenues (in millions) Turner (cable networks and digital media) $57,100 Home Box Office (pay television) 24,700 Warner Bros. (films, television, and videos) 55,400 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 46% Home Box Office 43% Warner Bros. 44% 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. Turner Home Box Office Warner Bros. Revenues Variable costs Contribution margin Contribution margin ratio (as a percent) % % b. Does your answer to (a) mean that the other segments are more profitable businesses?

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. 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 follows: Turner Home Box Office Warner Bros. Revenues Time Warner, Inc. Segment Revenues (in millions) 38% 30% 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. Variable costs Contribution margin $90,000 93,000 27,000 A 28% Turner Home Box Office Warner Bros. LA 000

Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900   $39,580 Income from operations $1,220 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a.  What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$________ million b.  What is McDonald's contribution margin ratio?________% c.  How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$_________ million

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. Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Turner Home Box Office Warner Bros. Time Warner, Inc. Segment Revenues (in millions) Assume that the variable costs as a percent of sales for each segment are as follows: Revenues Variable costs $94,300 79,200 29,300 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. Contribution margin Contribution margin ratio (as a percent) 40% 51% 37% Turner % Home Box Offic b. Does your answer to (a)…