Question
Problem 11-4 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
Problem 11-4
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 $46 per hour. Last month, K&J sold and built 140 Web sites for $760 each. Web design employees worked a total of 860 hours at a total payroll cost of $40,420.
Calculate the labor rate and efficiency variances for the past month. (Enter all variances as a positive number.)
Calculate the standard amount of contribution margin (sales price less variable labor cost) that K&J would expect to make on an average Web site.
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.)
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