Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 6, Problem 16E
(a)
To determine
Contribution Margin
Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.
The contribution margin and contribution margin ratio for each segment of Incorporation TW.
(b)
To determine
To Identify: Does the segment with the highest contribution margin in the option A means, that it is the most profitable segment with the highest operating income.
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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)
$62,900
Home Box Office (pay television)
65,900
Warner Bros. (films, television, and videos)
72,100
Assume that the variable costs as a percent of sales for each segment are as follows:
Turner
18%
Home Box Office
32%
Warner Bros.
52%
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…
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)
$71,200
Home Box Office (pay television)
10,800
Warner Bros. (films, television, and videos)
95,800
Assume that the variable costs as a percent of sales for each segment are as follows:
Turner
32%
Home Box Office
21%
Warner Bros.
33%
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
$fill in the blank 1
$fill in the blank 2
$fill…
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)
$71,500
Home Box Office (pay television)
89,500
Warner Bros. (films, television, and videos)
67,500
Assume that the variable costs as a percent of sales for each segment are as follows:
Turner
28%
Home Box Office
22%
Warner Bros.
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.
Turner
Home Box Office
Warner Bros.
Revenues
Variable costs
Contribution margin
Contribution margin ratio (as a percent)
%
%
%
Chapter 6 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 6 - What types of costs are customarily included in...Ch. 6 - Which type of manufacturing cost (direct...Ch. 6 - Which of the following costs would be included in...Ch. 6 - In the variable costing income statement, how are...Ch. 6 - Prob. 5DQCh. 6 - Discuss how financial data prepared on the basis...Ch. 6 - Prob. 7DQCh. 6 - Explain why rewarding sales personnel on the basis...Ch. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Explain why service companies use different...Ch. 6 - Prob. 1BECh. 6 - Prob. 2BECh. 6 - Prob. 3BECh. 6 - Prob. 4BECh. 6 - Contribution margin by segment The following...Ch. 6 - Prob. 6BECh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Variable costing income statement On November 30,...Ch. 6 - Absorption costing income statement On March 31....Ch. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Variable costing income statement for a service...Ch. 6 - Prob. 21ECh. 6 - Variable costing income statement for a service...Ch. 6 - Prob. 1PACh. 6 - Prob. 2PACh. 6 - Prob. 3PACh. 6 - Salespersons report and analysis Walthman...Ch. 6 - Prob. 5PACh. 6 - Prob. 6PACh. 6 - Absorption and variable costing income statements...Ch. 6 - Income statements under absorption costing and...Ch. 6 - Absorption and variable costing income statements...Ch. 6 - Prob. 4PBCh. 6 - Prob. 5PBCh. 6 - Prob. 6PBCh. 6 - Prob. 1ADMCh. 6 - Prob. 2ADMCh. 6 - Prob. 3ADMCh. 6 - Prob. 4ADMCh. 6 - Prob. 1TIFCh. 6 - Inventory effects under absorption costing BendOR,...Ch. 6 - Prob. 3TIF
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