Determine the desired roi per session

Reference no: EM131972035

Problem

Roxy'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 1,040 sessions. The company has invested $2,026,000 in the studio and expects a return on investment of 25%. Budgeted costs for the coming year are as follows:

	Per Session	Total
Direct materials (tapes, CDs, etc.)	$20
Direct labour	400
Variable overhead	60
Fixed overhead		$1,008,800
Variable selling and administrative expenses	45
Fixed selling and administrative expenses		499,200

Determine the desired ROI per session.

Reference no: EM131972035

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