Su nland's Recording Studio rents studio time to musicians in twohour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producerimixer.Anticipated annual volume is 1,200 sessions.The company has invested $2,163,840 in the studio and expects a return on investment of 25%. Budgeted costs for the coming year are as fol lows: Direct materials (tapes. CDs, etc.) $20 Direct labour 395 Variable overhead 45 Fixed overhead $1,164,000 Variable selling and administrative expenses 40 Fixed selling and administrative expenses 538,000