Dynatech Web Designs creates websites for businesses. Dynatech has a basic websi

Question

Dynatech Web Designs creates websites for businesses. Dynatech has a basic website creation package that it offers for a flat fee of $780. This package includes everything that a business would need to have a simple but functional website built. Dynatech estimates that each of these websites should take, on average, 6.8 hours of Web designer time. Dynatech pays its Web design employees an average of $41 per hour.

Last month, Dynatech sold and built 170 websites for $780 each. Web design employees worked a total of 880 hours at a total payroll cost of $39,600.

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

Actual contribution margin per Web site

Explanation / Answer

Actual contribution margin =$ 547

sales [170*780] 132600 less:variable cost 39600 contribution margin 93000 Number of website 170 contribution per website 93000/170 = 547

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