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war w pus pricing to determine various amounts. E9.21 (LO 2) Service Roxy's Recording Studio...

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war w pus pricing to determine various amounts. E9.21 (LO 2) Service Roxy's Recording Studio rents studio time to musicians in two-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 1,000 sessions. The company has invested $2,352,000 in the studio and expects a return on investment of 20%. Budgeted costs for the coming year are as follows: Per Session Total Direct materials (tapes, CDs, etc.) $20 Direct labour 400 Variable overhead Fixed overhead $950,000 Variable selling and administrative expenses Fixed selling and administrative expenses 500,000 Instructions a. Determine the total cost per session. b. Determine the desired ROI per session. c. Calculate the markup percentage on the total cost per session. d. Calculate the target price per session. 50 40

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