Questions: Compute the contribution margin ratio for each segment. Round ratios to the nearest tenth of a percent.

Solution Steps

To compute the contribution margin ratio for each segment, we need to follow these steps:

1. Calculate the variable operating expenses for each segment using the given percentages.
2. Subtract the variable operating expenses from the total revenues to get the contribution margin.
3. Divide the contribution margin by the total revenues to get the contribution margin ratio.
4. Convert the ratio to a percentage and round to the nearest tenth of a percent.

For each segment, the variable operating expenses are calculated using the formula: \[ \text{Variable Operating Expenses} = \text{Operating Expenses} \times \text{Variable Expense Percentage} \]

• Media Networks: \( 19371 \times 0.75 = 14528.25 \)
• Parks, Experiences, and Products: \( 16583 \times 0.75 = 12437.25 \)
• Studio Entertainment: \( 7135 \times 0.60 = 4281 \)
• Direct-to-Consumer & International: \( 19773 \times 0.80 = 15818.4 \)

The contribution margin for each segment is calculated as: \[ \text{Contribution Margin} = \text{Revenues} - \text{Variable Operating Expenses} \]

• Media Networks: \( 28393 - 14528.25 = 13864.75 \)
• Parks, Experiences, and Products: \( 16502 - 12437.25 = 4064.75 \)
• Studio Entertainment: \( 9636 - 4281 = 5355 \)
• Direct-to-Consumer & International: \( 16967 - 15818.4 = 1488.6 \)

The contribution margin ratio is given by: \[ \text{Contribution Margin Ratio} = \left( \frac{\text{Contribution Margin}}{\text{Revenues}} \right) \times 100 \]

• Media Networks: \[ \left( \frac{13864.75}{28393} \right) \times 100 \approx 48.8\% \]
• Parks, Experiences, and Products: \[ \left( \frac{4064.75}{16502} \right) \times 100 \approx 24.6\% \]
• Studio Entertainment: \[ \left( \frac{5355}{9636} \right) \times 100 \approx 55.6\% \]
• Direct-to-Consumer & International: \[ \left( \frac{1488.6}{16967} \right) \times 100 \approx 6.8\% \]

Final Answer