I have a quick question in regards to management accounting 16 edition Chapter 13 Problem 77. I read the answer on here yet it just doesnt add up in terms of compute the average variable cost of goods sold percentage or compute the average contribution margin percentage. I also dont understand where they got $171 towards the bottom during the break even formula mixed in with fixed expenses.

Complete Internet Exercise 13-77 (p. 575) on the job-costing system at Dell Computer. Address the requirements for this problem by visiting Dell Computer's website (www.dellcomputers.com). (A 1-page response is required.)

1.go to dell.com tkae a look at one of computers being offered what type of information do you find about the computer.

2. loook at most recent 10-K report for dell by following links to investor relations. What is the total revenue for dell? what is the change in the average selling price for desktops pcs? why do you think this occurred?

3. Assume that $3 billion of operating expense in addition to the depreciation and amortization are all the 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?

This is what I have so far in reference to these questions above.

Exercise: 13-77

1.

I went to home page for Dell as directed in the exercise and selected an Inspiron laptop for home use being offered. The product page for the Inspiron was very detailed and provided general information about the laptops features that would be informative for a potential buyer. The product page also advises the different options in regards to customizing the laptop. The multiple options for customizing the laptop were the following: screen size, memory, hard drive size, processor, operating system, and color (Dell, 2016). The product page was very specific on the difference between the options. The Inspiron product page did advise of starting prices before customizing that ranged from $199.00 to 799.99. The fact is the buyer builds the laptop therefore the dell company starts the price of the laptop at a standard price before building a more enhanced laptop. In other words, it is possible that the same Inspiron Laptop model could have more than one price pending on the customizing option from the buyer.

2.

The total revenue by Dell for the financial year after looking at the management discussion and analysis of the financial statements was $56,940. Overall, there was a change of 10% from last year financials. The reason this change occurred was the decrease in the revenue from customer segment. Furthermore, all the segments experienced declines in revenue. Of course, the declines were also caused by competitive pricing dynamics and increase competition from alternative devices such as smart phones and I-Pads.

3. Assume that $3 billion of operating expense in addition to the depreciation and amortization are all the 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?

On the review of the most recent consolidated statement of operations for Dell I found that the total cost of goods sold was $ 44,754 million and the selling, administrative, and engineering expenses were $ 9,174 million. Looking further into the recent statement I also found that the depreciation and amortization expenses for the current year were $ 1,144.

Now assuming that 3 billion of operating expense in addition to the depreciation and amortization are all fixed expenses, I computed the average variable cost of goods sold percentage. The fact is the variable cost is included in the cost of goods sold, administrative expenses, engineering expenses, and the operating expenses.

Therefore, the average contribution margin percentage: