Data for the year ended December 31, 2023:

Item	Amount
Revenue	$70,000,000,000
Cost of Goods Sold	$50,000,000,000
Operating Expenses	$15,000,000,000
Income Tax Expense	$8,000,000,000
Net Income	$7,000,000,000
Total Assets	$200,000,000,000
Total Liabilities	$100,000,000,000
Shareholders' Equity	$100,000,000,000

Managerial Accounting Process:

1. Recording Costs:
   • Lockheed Martin records its cost of goods sold (COGS) at $50 billion, reflecting costs associated with aerospace and defense contracts.
   • Operating expenses, including research and development, manufacturing, and administrative costs, are recorded at $15 billion.

1. Analyzing Costs:
   • Conduct job costing to allocate costs to specific contracts and projects.
   • Perform cost-benefit analysis of R&D expenditures to assess their impact on profitability.

1. Reporting Costs:
   • Present COGS in the income statement to demonstrate the direct costs of fulfilling defense contracts.
   • Detail operating expenses to provide transparency on costs incurred to support contract execution and compliance.
   • Provide cost variance reports to management to track deviations from budgeted costs and enhance cost control.

Requirements:

1. Calculate Lockheed Martin's gross profit margin and discuss cost management strategies in the aerospace and defense industry.
2. Determine Lockheed Martin's operating profit margin and analyze the role of cost controls in maintaining profitability.
3. Analyze the impact of income tax expense on Lockheed Martin's net income and propose tax planning strategies.
4. Evaluate how Lockheed Martin recognizes revenue from defense contracts and its implications for cost allocation.
5. Explain the significance of the Income Measurement Objective in Lockheed Martin's financial reporting and its alignment with cost reporting.
6. Discuss Lockheed Martin's return on assets (ROA) and return on equity (ROE), considering the impact of cost management on financial performance.
7. Perform a Cost-Benefit Analysis of Lockheed Martin's investment in aerospace technology, including projected costs and expected benefits in operational efficiency and competitive advantage.