Alma’s 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 1,090 sessions. The company has invested $2,343,000 in the studio and expects a return on investment (ROI) of 22%. Budgeted costs for the coming year are as follows.
Per Session Total
Direct materials (CDs, etc.) $ 19.80
Direct labor $407.00
Variable overhead $ 55.00
Fixed overhead $1,033,320
Variable selling and administrative expenses $ 35.00
Fixed selling and administrative expenses $542,820
Alma’s Recording Studio rents studio time to music
Alma’s Recording Studio rents studio time to music
Collapse question part
(a) Determine the total cost per session. (Round answer to 2 decimal places, e.g. 10.50.)
Total cost $ per session= ???
(b.)
Determine the desired ROI per session.= ???
(c) Calculate the mark-up percentage on the total cost per session.= ???
(d) Calculate the target price per session= ???
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