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) Home Box Office (pay television) $33,500 65,600 Warner Bros. (films, television, and videos) 22,500 Assume that the variable costs as a percent of sales for each segment are as follows: Turner 41% Home Box Office 46% Warner Bros. 42% 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. Revenues Variable costs Contribution margin Turner Home Box Office Warner Bros. 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. Revenues Variable costs Contribution margin Contribution margin ratio (as a percent) Turner Home Box Office Warner Bros. 65 X % 75 X % 60 X % 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 least sufficient to exceed the break-even point, then the segments would be somewhat profitable considered in determining the overall profitability of the segments. The contribution margin ratio in volume. X profitable segment. If the volume of business is not In the final analysis, the fixed costs also should be shows how sensitive the profit will be to changes X G