CVP Analysis Using Published Financial Statements (LO3, 4) Condensed data in thousands of dollars (000) from Netflixs
Question:
CVP Analysis Using Published Financial Statements (LO3, 4)
Condensed data in thousands of dollars (000) from Netflix’s 2007 and 2008 income statements follow:
2008 2007 REVEMUGS apace ne nme nt a ear oi cl knc ant Shs ena $1,364,661 $1,205,340 Cost of revenues and operating expenses................ (1,243,155) (1,113,567)
OperatingiprOtiteemmmerr secon ee soon rst fee teoke necator tee $ 121,506 BS RLS:
Required
a. Develop a cost-estimation equation for Netflix’s annual cost of revenues and operating expenses.
b. Determine Netflix’s annual break-even point.
c. Predict operating profit for 2009, assuming 2009 sales of $1,670,269 thousand.
d. Identify the assumptions required to use the equations and amounts computed above.
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