Data for the year ended December 31, 2023:

Item	Amount
Revenue	$95,000,000,000
Cost of Goods Sold	$40,000,000,000
Operating Expenses	$30,000,000,000
Income Tax Expense	$10,000,000,000
Net Income	$15,000,000,000
Total Assets	$200,000,000,000
Total Liabilities	$100,000,000,000
Shareholders' Equity	$100,000,000,000

Managerial Accounting Process:

1. Recording Costs:
   • Johnson & Johnson records its cost of goods sold (COGS) at $40 billion, reflecting costs associated with manufacturing pharmaceuticals, medical devices, and consumer health products.
   • Operating expenses, including R&D, marketing, and administrative costs, are recorded at $30 billion.

1. Analyzing Costs:
   • Conduct product-level profitability analysis to assess the profitability of different product segments.
   • Perform cost variance analysis to identify cost-saving opportunities in manufacturing and marketing.

1. Reporting Costs:
   • Present COGS in the income statement to show the direct costs associated with producing pharmaceuticals and medical devices.
   • Detail operating expenses to provide transparency on costs incurred to support R&D, marketing, and administrative functions.
   • Provide cost allocation reports to show how costs are distributed across different business segments and geographic regions.

Requirements:

1. Calculate Johnson & Johnson's gross profit margin and discuss cost management strategies across its diversified product portfolio.
2. Determine Johnson & Johnson's operating profit margin and analyze the role of cost controls in maintaining profitability in healthcare.
3. Analyze the impact of income tax expense on Johnson & Johnson's net income and propose tax strategies to optimize tax liabilities.
4. Evaluate how Johnson & Johnson recognizes revenue from healthcare product sales and its relationship with cost allocation.
5. Explain the significance of the Income Measurement Objective in Johnson & Johnson's financial reporting and its alignment with cost management.
6. Discuss Johnson & Johnson's return on assets (ROA) and return on equity (ROE), considering the influence of cost management on financial performance.
7. Perform a Cost-Benefit Analysis of Johnson & Johnson's investment in digital health technology, including projected costs and expected benefits in patient care and operational efficiency.