Verizon Communications Inc.
 Data for the year ended December 31, 2023:

Item	Amount
Revenue	$120,000,000,000
Cost of Goods Sold	$50,000,000,000
Operating Expenses	$40,000,000,000
Income Tax Expense	$15,000,000,000
Net Income	$15,000,000,000
Total Assets	$250,000,000,000
Total Liabilities	$150,000,000,000
Shareholders' Equity	$100,000,000,000

Managerial Accounting Process:

1. Recording Costs:
   • Verizon records its cost of goods sold (COGS) at $50 billion, reflecting costs related to providing telecommunications services.
   • Operating expenses, including marketing, customer service, and network maintenance, are recorded at $40 billion.

1. Analyzing Costs:
   • Conduct cost-volume-profit analysis to assess the profitability of different service offerings.
   • Perform activity-based costing to allocate costs accurately across different service lines and customer segments.

1. Reporting Costs:
   • Present COGS in the income statement to show the direct costs associated with revenue generation.
   • Detail operating expenses to provide transparency on the costs incurred to support business operations.
   • Provide cost variance reports to management to highlight deviations from budgeted costs and identify cost-saving opportunities.

Requirements:

1. Calculate Verizon's gross profit margin and discuss how cost management impacts profitability in the telecommunications industry.
2. Determine Verizon's operating profit margin and analyze the role of cost control in maintaining financial health.
3. Analyze the impact of income tax expense on Verizon's net income and propose tax strategies to optimize tax liabilities.
4. Evaluate how Verizon recognizes revenue from telecommunications services and its relationship with cost management.
5. Explain the significance of the Income Measurement Objective in Verizon's financial strategy and its alignment with cost reporting.
6. Discuss Verizon's return on assets (ROA) and return on equity (ROE), considering the influence of cost efficiency on financial ratios.
7. Perform a Cost-Benefit Analysis of Verizon's investment in 5G network expansion, including projected costs and expected revenue benefits.