Develop a cost-estimation equation for microsofts annual

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Reference no: EM133265481

Question: CVP Analysis Using Published Financial Statements 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 pro?t for 2020, assuming 2020 sales of $150,000 million.

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

Reference no: EM133265481

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