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)$90,600 Home Box Office (pay television)74,100 Warner Bros. (films, television, and videos)13,300 Assume that the variable costs as a percent of sales for each segment are as follows:Turner27% Home Box Office42% Warner Bros.38% a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to whole percents for each segment from the information given. TurnerHome Box OfficeWarner Bros.Revenues$ $ $ Variable costs Contribution margin$ $ $ Contribution margin ratio (as a percent) % % %

Given Information: Turner (cable networks and digital media) Home Box Office (pay…

Answered: The operating revenues of the three…

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

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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 of which are indicated in parentheses.

Time Warner, Inc. Segment Revenues (in millions)
Turner (cable networks and digital media)	$90,600
Home Box Office (pay television)	74,100
Warner Bros. (films, television, and videos)	13,300

Assume that the variable costs as a percent of sales for each segment are as follows:

Turner	27%
Home Box Office	42%
Warner Bros.	38%

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)		%		%		%

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