Answer and Explanation:
a. Below is the computation of the contribution margin for each segment:
(in millions)
Details Investor Advisor Services Services
Revenue from
operations $1,681 $1,660
Plus:
Depreciation $171 $154
Contribution
Margin $1,852 $1,814
2. Next, we assess the decrease in operating income
(in millions)
Details Combined services Institutional Services
Total Revenue $9,368 $4,771
Less:
Variable expense $5,702 $2,919
($2,919 + $2,783)
Contribution
margin $3,666 $1,852
Less:
Fixed costs -$325 -$171
Net earnings $3,341 $1,681
So from the previous calculations, it shows that the net operating income has decreased by
= $3,341 - $1,681
= $1,660 million
The variable costs can be calculated as
= Service revenues minus income from operations minus depreciation expense
Answer:Hello! I'm working through this question for you!
Explanation: