Sipacore Web Designs creates websites for businesses. Sipacore has a basic websi
ID: 2578255 • Letter: S
Question
Sipacore Web Designs creates websites for businesses. Sipacore has a basic website creation package that it offers for a flat fee of $800. This package includes everything that a business would need to have a simple but functional website built. Sipacore estimates that each of these websites should take, on average, 7.5 hours of Web designer time. Sipacore pays its Web design employees an average of $41 per hour.
Last month, Sipacore sold and built 150 websites for $800 each. Web design employees worked a total of 780 hours at a total payroll cost of $36,660.
Sipacore Web Designs creates websites for businesses. Sipacore has a basic website creation package that it offers for a flat fee of $800. This package includes everything that a business would need to have a simple but functional website built. Sipacore estimates that each of these websites should take, on average, 7.5 hours of Web designer time. Sipacore pays its Web design employees an average of $41 per hour.
Last month, Sipacore sold and built 150 websites for $800 each. Web design employees worked a total of 780 hours at a total payroll cost of $36,660.
Explanation / Answer
Calculation of standard amount of contribution margin
sales price $800
less: variable labor cost ($41*7.5) $307.5
$ 492.5
Contribution margn =