Cost volume profit behavior at apple inc.
Apple increased revenues by 66% from 2010 to 2011. from $65.2 billion to $108.2 billion. however operating income during this period increased by 84%. going from $18.4 billion to $33.8 billion. by comparison 2009-2010, its revenue increased by79% and its operating income increased by139%. revenue in 2009 were $36.5 billion and income $7.7billion,
A. what concept explains why apples income will rise 84% while its revenue only rose 66%.
b. does the concept identified in requirement result from fixed cost or variable cost.
c. from 2009-2010 apples percentage increase was 1.8 times its percentage increase in revenue. From 2010-2011 apples percentage increase in earning was only 1.3 times its increase in revenue. based on the concept of cost volume profit behavior, what might explain why the ratio of increase in earnings to increase in revenue was lower from 2010 to 2011 than 2009-2010. Assume apples general pricing policies and cost structure did not change.