acct 3301 cost accounting chapter 4D.docx - M Anthony LLP...

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M. Anthony, LLP, produces music in a studio in London. The cost of producing one typical song follows: Average Cost per Song: Labor, including musicians and technicians $16,200 Variable overhead, including clerical support 2,200 Fixed overhead 20,200 Marketing and administrative costs (all fixed) 20,536 Total cost per song $59,136 The fixed costs allocated to each song are based on the assumption that the studio produces 50 songs per month. Required: Treat each question independently. Unless stated otherwise, M. Anthony charges $72,000 per song produced. a. How many songs must the firm produce per month to break even? NUMBER OF SONGS 38 Explanation:
b. Market research estimates that a price increase to $82,000 per song would decrease monthly volume to 42 songs. The accounting department estimates that fixed costs would remain unchanged

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