Questions:

1. What is the total cost per session?

2. What is the desired ROI per session?

3. Calculate the mark-up percentage on the total cost per session.

4. Calculate the target price per session.

Crane'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 1,100 sessions. The company has invested $2,172,500 in the studio and expects a return on investment of 25%. Budgeted costs for the coming year are as follows