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...

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.

Assume that the variable costs as a percent of sales for each segment are as follows:

a.Determine the contribution margin and contribution margin ratio. Enter amounts in millions. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to the nearest whole percent for each segment from the information given. Enter all amounts as positive numbers.

b.Does your answer to (b) 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   shows how sensitive the profit will be to changes in volume.