Develop a cost-estimation equation for microsoft annual cost

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Question - Condensed data in millions of dollars from Microsoft's 2019 and 2018 income statements follow:

 

2019

2018

Revenues

$125,843

$110,360

Total cost of revenues and operating expenses

82,884

75,302

Operating income

$42,959

$35,058

Required -

a. Develop a cost-estimation equation for Microsoft's annual cost of revenues and operating expenses using revenues as the activity.

b. Determine Microsoft's annual break-even point.

c. Predict operating profit for 2020, assuming 2020 sales of $150,000 million.

d. Identify the assumptions required to use the equations and amounts computed above.

Reference no: EM133123506

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