Condensed data in millions of dollars from Apple’s 2014 and 2015 income statements follow: 

Required

a. Develop a cost-estimation equation for Apple’s annual cost of revenues and operating expenses.

b. Determine Apple’s annual break-even point.

c. Predict operating profit for 2016, assuming 2016 sales of $284,000 million.

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

Transcribed Image Text:

2015 2014 Revenues Total cost of revenues and operating expenses... Operating income... $233,715 (162,485) $ 71,230 $182,795 (130,292) $ 52,503