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a. Prepare a variable costing income statement for The Walt Disney Company by segment. If required, use a minus sign to indicate an operating loss. Round all amounts to the nearest million. Operating income/loss The Walt Disney Company Variable Costing Income Statement (in millions) Line Item Description Networks Media Parks, Experiences, and Products Media Networks Parks, Experiences, and Products Studio Entertainment % b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio % % Studio Entertainment Direct-to-Consumer & International % $ Direct-to-Consumer & International c. Based on your answers to (a) and (b), interpret the segment performance. All segments generated a segments generated operating contribution margin, even though the Parks, Experiences, and Products and Direct-to-Consumer & International . The Media Networks segment generated the contribution margin and contribution margin ratio. The Parks, Experiences, and Products and Studio Entertainment segments generated approximately the contribution margin ratios. However, because of its size, the Parks, Experiences, and Products segment generated contribution margin than the Studio Entertainment segment. The Direct-to-Consumer & International segment generated the contribution margin ratio and contribution margin. The recent COVID-19 pandemic affected the preceding results. The Parks, Experiences, and Products and Studio Entertainment segments were affected. Thus, the preceding results are of Disney's normal operations for these segments.

a. Prepare a variable costing income statement for The Walt Disney Company by segment. If required, use a minus sign to indicate an operating loss. Round all amounts to the nearest million. Operating income/loss The Walt Disney Company Variable Costing Income Statement (in millions) Line Item Description Networks Media Parks, Experiences, and Products Media Networks Parks, Experiences, and Products Studio Entertainment % b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio % % Studio Entertainment Direct-to-Consumer & International % $ Direct-to-Consumer & International c. Based on your answers to (a) and (b), interpret the segment performance. All segments generated a segments generated operating contribution margin, even though the Parks, Experiences, and Products and Direct-to-Consumer & International . The Media Networks segment generated the contribution margin and contribution margin ratio. The Parks, Experiences, and Products and Studio Entertainment segments generated approximately the contribution margin ratios. However, because of its size, the Parks, Experiences, and Products segment generated contribution margin than the Studio Entertainment segment. The Direct-to-Consumer & International segment generated the contribution margin ratio and contribution margin. The recent COVID-19 pandemic affected the preceding results. The Parks, Experiences, and Products and Studio Entertainment segments were affected. Thus, the preceding results are of Disney's normal operations for these segments.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Segment Contribution Margin Analysis The Walt Disney Company (DIS) is a global entertainment company that is organized into four business segments as follows: Media Networks: Television production and distribution, including ABC television network, ESPN, National Geographic. Parks, Experiences, and Products: Theme parks and resorts, including Walt Disney World and Disneyland; Experiences, including Disney Cruise Line and Disney Vacation Club; Products, including Disney and Pixar characters, comic books, and magazines. Studio Entertainment: Music and motion picture production and distribution, including Twentieth Century Studios, Marvel, and Lucasfilm. Direct-to-Consumer & International: Streaming services, including Disney+, ESPN+, and Hulu. For a recent year, Disney reported the following segment results (in millions): Segment Parks, Segment Experiences, Media and Networks Revenues $28,393 Operating expenses (19,300) Operating income Assume the following percentages of total operating expenses for each segment are variable: $9,093 Direct-to- Consumer Segment & Products Entertainment International $16,502 $9,636 $16,967 (16,600) (7,100) (19,900) Segment Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International $(98) Percentage of Variable Operating Expenses 75% 60% 80% 70% $2,536 $(2,933)
Transcribed Image Text:Segment Contribution Margin Analysis The Walt Disney Company (DIS) is a global entertainment company that is organized into four business segments as follows: Media Networks: Television production and distribution, including ABC television network, ESPN, National Geographic. Parks, Experiences, and Products: Theme parks and resorts, including Walt Disney World and Disneyland; Experiences, including Disney Cruise Line and Disney Vacation Club; Products, including Disney and Pixar characters, comic books, and magazines. Studio Entertainment: Music and motion picture production and distribution, including Twentieth Century Studios, Marvel, and Lucasfilm. Direct-to-Consumer & International: Streaming services, including Disney+, ESPN+, and Hulu. For a recent year, Disney reported the following segment results (in millions): Segment Parks, Segment Experiences, Media and Networks Revenues $28,393 Operating expenses (19,300) Operating income Assume the following percentages of total operating expenses for each segment are variable: $9,093 Direct-to- Consumer Segment & Products Entertainment International $16,502 $9,636 $16,967 (16,600) (7,100) (19,900) Segment Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International $(98) Percentage of Variable Operating Expenses 75% 60% 80% 70% $2,536 $(2,933)
a. Prepare a variable costing income statement for The Walt Disney Company by segment. If required, use a minus sign to indicate an operating loss. Round all amounts to the nearest million. The Walt Disney Company Variable Costing Income Statement (in millions) Line Item Description Operating income/loss $ Media Networks Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & % b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio % % Parks, Experiences, and Products % $ Studio Entertainment Direct-to-Consumer & International International c. Based on your answers to (a) and (b), interpret the segment performance. All segments generated a contribution margin, even though the Parks, Experiences, and Products and Direct-to-Consumer & International . The Media Networks segment generated the contribution margin and contribution margin segments generated operating ratio. The Parks, Experiences, and Products and Studio Entertainment segments generated approximately the contribution margin ratios. However, because of its size, the Parks, Experiences, and Products segment generated contribution margin than the Studio Entertainment segment. The Direct-to-Consumer & International segment generated the contribution margin ratio and contribution margin. The recent COVID-19 pandemic affected the preceding results. The Parks, Experiences, and Products and Studio Entertainment segments were affected. Thus, the preceding results are of Disney's normal operations for these segments.
Transcribed Image Text:a. Prepare a variable costing income statement for The Walt Disney Company by segment. If required, use a minus sign to indicate an operating loss. Round all amounts to the nearest million. The Walt Disney Company Variable Costing Income Statement (in millions) Line Item Description Operating income/loss $ Media Networks Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & % b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio % % Parks, Experiences, and Products % $ Studio Entertainment Direct-to-Consumer & International International c. Based on your answers to (a) and (b), interpret the segment performance. All segments generated a contribution margin, even though the Parks, Experiences, and Products and Direct-to-Consumer & International . The Media Networks segment generated the contribution margin and contribution margin segments generated operating ratio. The Parks, Experiences, and Products and Studio Entertainment segments generated approximately the contribution margin ratios. However, because of its size, the Parks, Experiences, and Products segment generated contribution margin than the Studio Entertainment segment. The Direct-to-Consumer & International segment generated the contribution margin ratio and contribution margin. The recent COVID-19 pandemic affected the preceding results. The Parks, Experiences, and Products and Studio Entertainment segments were affected. Thus, the preceding results are of Disney's normal operations for these segments.
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