Please help asap. K&J Web Designs creates Web sites for businesses. K&J has a ba

Question

Please help asap.

K&J Web Designs creates Web sites for businesses. K&J has a basic Web site creation package that it offers for a flat fee of $760. This package includes everything that a business would need to have a simple but functional Web site built. K&J estimates that each of these Web sites should take, on average, 7.7 hours of Web designer time. K&J pays its Web design employees an average of $39 per hour. Last month, K&J sold and built 130 Web sites for $760 each. Web design employees worked a total of 840 hours at a total payroll cost of $40,320.

Calculate the actual amount of contribution margin (sales price less variable labor cost) that K&J made, on average, on each Web site in the past month. (Round answer to 0 decimal places, e.g. 125.)

Explanation / Answer

Actual sales = 130* 760 =   98,800

less:designer labor cost       (40320)

Actual contribution      = $ 58480

Contribution per website = 58480 / 130

                                               = $ 450 per website approx

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