MA610 Managerial Accounting Discussion Question 3-1

Look at the most recent Consolidated Statement of Operations for Dell. What were the costs of goods sold and the selling, administrative, and engineering expenses for the current year? Refer to the cash flow statement for the current year. How much was the depreciation and amortization for the current year? Assume that $3 billion of operating expenses in addition to the depreciation and amortization are all fixed expenses. Compute the average variable cost of goods sold percentage. Compute the average contribution margin percentage. What would be the break-even sales dollars under this scenario? Does this seem reasonable, given the current operating income reported by the firm?
Cost of Goods--$67,403,00.00
Selling, Administrative, and Engineering-$18,998,00.00
Depreciation and Amortization-$6,158,00.00

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