Almas Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the...
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Almas Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer/mixer. Anticipated annual volume is 1,160 sessions. The company has invested $ 2,399,460 in the studio and expects a return on investment (ROI) of 20%. Budgeted costs for the coming year are as follows.
Per Session
Total
Direct materials (CDs, etc.)
$ 20
Direct labor
$405
Variable overhead
$ 55
Fixed overhead
$1,102,000
Variable selling and administrative expenses
$ 35
Fixed selling and administrative expenses
$ 585,800
(a)
Determine the total cost per session.
Total cost
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per session
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(d)
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