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 Segment Media Networks Parks, Experiences, and Products Direct-to- Segment Entertainment Consumer & International Revenues $28,393 Operating expenses (19,300) Operating Income $9,093 $16,502 (16,600) $(98) $9,636 $16,967 (7,100) (19,700) $2,536 $(2,733) Assume the following percentages of total operating expenses for each segment are variable: Segment Percentage of Variable Operating Expenses Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International 75% 60% 80% 70% 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 Line Item Description Sales Variable operating expenses Contribution margin Fixed operating expenses Operating Income/loss Feedback ▼Check My Work Partially correct (in millions) Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio Media Networks Parks, Experiences, and Products Studio Entertainment % % % Direct-to-Consumer & International %

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 Segment Media Networks Parks, Experiences, and Products Direct-to- Segment Entertainment Consumer & International Revenues $28,393 Operating expenses (19,300) Operating Income $9,093 $16,502 (16,600) $(98) $9,636 $16,967 (7,100) (19,700) $2,536 $(2,733) Assume the following percentages of total operating expenses for each segment are variable: Segment Percentage of Variable Operating Expenses Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International 75% 60% 80% 70% 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 Line Item Description Sales Variable operating expenses Contribution margin Fixed operating expenses Operating Income/loss Feedback ▼Check My Work Partially correct (in millions) Media Networks Parks, Experiences, and Products Studio Entertainment Direct-to-Consumer & International b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. Contribution Margin Ratio Media Networks Parks, Experiences, and Products Studio Entertainment % % % Direct-to-Consumer & International %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 14E: The Walt Disney Company (DIS) has four business segments, described as follows: Media Networks:...

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