Rachels recording studio rents studio time to musicians in, Ask an Expert

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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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M970368

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