Bramble'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 1,140 sessions. The
company has invested $2,346,120 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
$405
Variable overhead
$45
Fixed overhead
$1,077,300
Variable selling and administrative expenses
$40
Fixed selling and administrative expenses
$575,700
(a)
Determine the total cost per session.