Rachel's Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of

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Rachel'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 $2,058,000 in the studio and expects a return on investment (ROI) of 20%. Budgeted costs for the coming year are as follows.


Rachel's Recording Studio rents studio time to musicians in 2-ho


Instructions
(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.

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Managerial Accounting Tools for business decision making

ISBN: 978-0470477144

5th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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