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Blossom'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

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Blossom'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 1,400 sessions. The company has invested $2,138,640 in the studio and expects a return on investment of 25%. Budgeted costs for the coming year are as follows: Per Session Total Direct materials (tapes, CDs, etc.) $25 Direct labour 410 Variable overhead 60 Fixed overhead $1,344,000 Variable selling and administrative expenses 35 Fixed selling and administrative expenses 728,000

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