Question
Sunland'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
Sunland'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 1,200 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 follows: Direct materials (tapes, CDs, etc.) Direct labour Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a) Determine the total cost per session. Total cost per session $ Per Session Total $20 395 45 $1,164,000 40 40 588,000
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