Calculate labor rate and efficiency variances for past month

Assignment Help Accounting Basics

Reference no: EM131893143

Problem

K& J Web Designs creates Web sites for businesses, K&J has a basic Web site creation package that it offers for a fee of $740. 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, 8.9 hours of Web designer time. K&J pays its web design employees an average of $36 per hour.

Last month, K& J sold and built 140 Web sites for $740 each. Web design employees worked a total of 850 hours at a total payroll cost of $40, 800.

Calculate the labor rate and efficiency variances for the past month.

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.

Reference no: EM131893143

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