Grouper'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 1,020 sessions. The company has invested $2,299,080 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 $40 Fixed selling and administrative expenses (a) Per Session $20 $395 $45 * Your Answer Correct Answer Total $974,100 $515,100
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Grouper'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 1,020 sessions. The company has invested $2,299,080 in the studio and expects a
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