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14-22 (Cont'd.)

Sales-mix percentages:

Budgeted

Actual

Lower-tier

= 0.40

= 0.30

Upper-tier

= 0.60

= 0.70

Solution Exhibit 14-22 presents the sales-volume, sales-quantity, and sales-mix variances for lower-tier tickets, upper-tier tickets, and in total for Detroit Penguins in 2004.

The sales-quantity variances can also be computed as:

=    

The sales-quantity variances are:

Lower-tier tickets=(11,000 – 10,000) × 0.40 × $20=  $8,000 F

Upper-tier tickets=(11,000 – 10,000) × 0.60 × $  5=    3,000 F

All tickets$11,000 F

The sales-mix variance can also be computed as:

=  ×  

The sales-mix variances are:

Lower-tier tickets=11,000 × (0.30 – 0.40) × $20=$22,000 U

Upper-tier tickets=11,000 × (0.70 – 0.60) × $  5=    5,500 F

All tickets$16,500 U

3.The Detroit Penguins increased average attendance by 10% per game.  However, there was a sizable shift from lower-tier seats (budgeted contribution margin of $20 per seat) to the upper-tier seats (budgeted contribution margin of $5 per seat).  The net result: the actual contribution margin was $5,500 below the budgeted contribution margin.

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