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Alma's Recording Studio rents studio time to musicians in 2-hour blocks

Accounting

Alma's Recording Studio rents studio time to musicians in 2-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 1,040 sessions. The company has invested $2,344,160 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 (CDs, etc.) $ 20 Direct labor $410 Variable overhead $ 50 Fixed overhead Variable selling and administrative expenses $ 35 Fixed selling and administrative expenses 
$988,000 
$514,800 
Determine the total cost per session. 
Total cost$ per session Determine the desired ROI per session. (Round answer to 2 decimal places, e.g. 10.50.) 
ROI $ 
per session 
Calculate the markup percentage on the total cost per session. Markup percentage % per session Calculate the target price per session. (Round answer to 2 decimal places, e.g. 10.50.) Target price $ per session 
 

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