E8.6 (LO 2), AP Service 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 1,000 sessions. The company has invested $2,352,000 in the studio and expects a return on investment (ROI) of 20%. Budgeted costs for the coming year are as follows. Instructions Direct materials (CDs, etc.) Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses a. Determine the total cost per session. b. Determine the desired ROI per session. c. Calculate the markup percentage on the total cost per session. d. Calculate the target price per session. Per Session $20 400 50 40 Total $950,000 500,000

E8.6 (LO 2), AP Service 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 1,000 sessions. The company has invested $2,352,000 in the studio and expects a return on investment (ROI) of 20%. Budgeted costs for the coming year are as follows. Instructions Direct materials (CDs, etc.) Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses a. Determine the total cost per session. b. Determine the desired ROI per session. c. Calculate the markup percentage on the total cost per session. d. Calculate the target price per session. Per Session $20 400 50 40 Total $950,000 500,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 25P: Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials. Novo...

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Alma's Recording Studio rents studio time to musicians in 2-hours 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 1,000 sessions. The company has invested $2,352,000 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 $400 Variable overhead $50 Fixed overhead $950,000 Variable selling and administrative expenses $40 Fixed selling and administrative expenses $500,000 c. Calculate the markup percentage on the total cost per session. d. Calculate the target price per session.
Alma's Recording Studio rents studio time to musicians in 2-hours 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 1,000 sessions. The company has invested $2,352,000 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 $400 Variable overhead $50 Fixed overhead $950,000 Variable selling and administrative expenses $40 Fixed selling and administrative expenses $500,000 a. Determine the total cost per session. b. Determine the desired ROI per session.
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Flounder'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 1,160 sessions. The company has invested $2,399,460 in the studio and expects a return on investment (ROI) of 20%. Budgeted costs for the coming year are as follows. Direct materials (CDs, etc.) Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a) Your answer is correct. Determine the total cost per session. Total cost $ (b) eTextbook and Media 1970 ROI $ Per Session $ 20 $405 $55 $35 per session Total per session $1,102,000 $585,800 Determine the desired ROI per session. (Round answer to 2 decimal places, e.g. 10.50.) Attempts: 1 of 5 used
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