Time Warner, Inc. Segment Revenues (in millions) Turner (cable networks and digital media) $29,000 Home Box Office (pay television) 42, 300 Warner Bros. (films, television, and videos) 71, 300 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 54% Home Box Office 18% Warner Bros. 17% 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 $ fill in the blank 1 $ fill in the blank 2 $ fill in the blank 3 Variable costs fill in the blank 4 fill in the blank 5 fill in the blank 6 Contribution margin $ fill in the blank 7 S fill in the blank 8 $ fill in the blank 9 Contribution margin ratio (as a percent) fill in the blank 10 % fill in the blank 11 % fill in the blank 12 % b. Does your answer to (b ) mean that the other segments are more profitable businesses? The higher contribution margin ratio of a segment should not be interpreted as being the profitable segment. If the volume of business is not sufficient to exceed the break-even point, then the segments would be. In the final analysis, the fixed costs also should be considered in determining the overall profitability of the segments. The shows how sensitive the profit will be to changes in volume.
Time Warner, Inc. Segment Revenues (in millions) Turner (cable networks and digital media) $29,000 Home Box Office (pay television) 42, 300 Warner Bros. (films, television, and videos) 71, 300 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 54% Home Box Office 18% Warner Bros. 17% 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 $ fill in the blank 1 $ fill in the blank 2 $ fill in the blank 3 Variable costs fill in the blank 4 fill in the blank 5 fill in the blank 6 Contribution margin $ fill in the blank 7 S fill in the blank 8 $ fill in the blank 9 Contribution margin ratio (as a percent) fill in the blank 10 % fill in the blank 11 % fill in the blank 12 % b. Does your answer to (b ) mean that the other segments are more profitable businesses? The higher contribution margin ratio of a segment should not be interpreted as being the profitable segment. If the volume of business is not sufficient to exceed the break-even point, then the segments would be. In the final analysis, the fixed costs also should be considered in determining the overall profitability of the segments. The shows how sensitive the profit will be to changes in volume.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 16E
Related questions
Question
Transcribed Image Text:Time Warner, Inc. Segment Revenues (in millions) Turner (cable networks and digital media) $29,000 Home
Box Office (pay television) 42, 300 Warner Bros. (films, television, and videos) 71, 300 Assume that the
variable costs as a percent of sales for each segment are as follows: Turner 54% Home Box Office 18%
Warner Bros. 17% 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 $
fill in the blank 1 $ fill in the blank 2 $ fill in the blank 3 Variable costs fill in the blank 4 fill in the blank 5 fill in
the blank 6 Contribution margin $ fill in the blank 7 $ fill in the blank 8 $ fill in the blank 9 Contribution margin
ratio (as a percent) fill in the blank 10 % fill in the blank 11 % fill in the blank 12% b. Does your answer to (b
mean that the other segments are more profitable businesses? The higher contribution margin ratio of a
segment should not be interpreted as being the profitable segment. If the volume of business is not
sufficient to exceed the break-even point, then the segments would be. In the final analysis, the fixed costs
also should be considered in determining the overall profitability of the segments. The shows how sensitive
the profit will be to changes in volume.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning