Matching Principle at Apple Inc.

• Apple Inc. applies the matching principle to match costs with related revenues.

Values:	Year 1	Year 2
Cost of Goods Sold (COGS)	$20,000,000	$25,000,000
Sales Revenue	$100,000,000	$120,000,000

• Requirements:
  1. Apply the matching principle to match COGS with sales revenue for Apple Inc. in Year 1 and Year 2.
  2. Calculate the gross profit and gross profit margin for each year.
  3. Discuss the importance of the matching principle in determining profitability.
  4. Recommend methods to improve the application of the matching principle at Apple Inc.