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):

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: 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): Assume the following percentages of total operating expenses for each segment are variable: The Walt Disney Company Variable Costing Income Statement 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 Costinn Income Statement b. Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent. 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 segments generated operating generated the contribution margin and contribution margin ratio. The Parks, Experiences, and Products and Studio Entertainment segments generated approximately the . The Media Networks segmer 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