Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Turner Home Box Office Warner Bros. Segment Revenues (in millions) Assume that the variable costs as a percent of sales for each segment are as follows: Revenues Variable costs $94,300 79,200 29,300 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. Contribution margin. Contribution margin ratio (as a percent) 40% 51% 37% Turner % Home Box Offic b. Does your answer to (a) 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 Ishows how sensitive

Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Turner Home Box Office Warner Bros. Segment Revenues (in millions) Assume that the variable costs as a percent of sales for each segment are as follows: Revenues Variable costs $94,300 79,200 29,300 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. Contribution margin. Contribution margin ratio (as a percent) 40% 51% 37% Turner % Home Box Offic b. Does your answer to (a) 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 Ishows how sensitive

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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Given the following information for SAMAH Company, answer the following questions: RO 260 840 Units RO 145 R.O 620,000 Selling price (per unit) Number of units sold Variable cost (per unit) Fixed cost 1. Calculate contribution margin ratio 2. Find Breakeven Point in amount 3. Find Breakeven Point in units P =1
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