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a. What concept explains, at least in part, how Netflix's net income could rise by 211 percent when its revenue rose only 72 percent? b.
a. What concept explains, at least in part, how Netflix's net income could rise by 211 percent when its revenue rose only 72 percent? b. Does the concept identified in Requirement a result from fixed costs or variable costs? c. Analyze the data for the four expense categories presented. Which one seems the most responsible for causing the percentage increase in operating income to be so much greater than the percentage increase in revenues? Explain your answer with computations. Note: You will need to use some creative thought for this, as the material in the chapter does not show an exact demonstration, but the concepts involved should be familiar. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Partial Statement of Operations \\ (amounts in thousands) \end{tabular}} \\ \hline & \multicolumn{3}{|c|}{ Year ended December 31, } \\ \hline & 2019 & 2018 & 2017 \\ \hline Revenues & $20,156,447 & $15,794,341 & $11,692,713 \\ \hline Cost of revenues & 12,440,213 & 9,967,538 & 7,659,666 \\ \hline Marketing & 2,652,462 & 2,369,469 & 1,278,022 \\ \hline Technology and development & 1,545,149 & 1,221,814 & 1,052,778 \\ \hline General and administrative & 914,369 & 630,294 & 863,568 \\ \hline Operating income & $2,604,254 & $1,605,226 & $838,679 \\ \hline \end{tabular}
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