Segment analysis for a service company Charles Schwab Corporation (SCHW) is one of the more...
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Accounting
Segment analysis for a service company
Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions):
Investor Services
Advisor Services
Revenues
$5,411
$2,067
Operating income
2,031
962
Depreciation
180
54
Investor Services (in millions)
Advisor Services (in millions)
Estimated contribution margin
2211
1016
If Schwab decided to sell its Advisor Services accounts to another company, estimate how much operating income would decline under the following assumptions.
Assume the fixed costs that serve Advisor investors would not be sold but would be used by the other sector: ____ million Assume the fixed assets were sold: ___ million
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