View the step-by-step solution to:

Rachel's Recording Studio rents studio time to musicians in 2-hour blocks.


Rachel's Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of the studio facilities, a digital recorded tape of the performance, and a professional music producer/mixer. Anticipated annual volume is 1,000 sessions. The company has invested $2,058,000 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 (tapes, CDs, etc) $20
Direct labor 400
Variable overhead 50
Fixed overhead $950,000
Variable selling and administrative expenses 40
Fixed selling and administrative expenses 500,000




Determine the total cost per session.
$





Determine the desired ROI per session. (Round answer to 2 decimal places, e.g. 10.50.)
$





Calculate the mark-up percentage on the total cost per session. (Round answer to 0 decimal places, e.g. 10%. Use the rounded amounts from the previous questions when calculating the answer for this question.)
%





Calculate the target price per session. (Round answer to 2 decimal places, e.g. 10.50. Use the rounded amounts from the previous questions when calculating the answer for this question.)
$

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question