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14-22 (Cont'd.)

Solution Exhibit 14-22

Columnar Presentation of Sales-Volume, Sales-Quantity and Sales-Mix Variances for Detroit Penguins

Flexible Budget:

Actual Units of

All Products Sold

× Actual Sales Mix

× Budgeted Contribution

Margin per Unit

(1)

Actual Units of

All Products Sold

× Budgeted Sales Mix

× Budgeted Contribution Margin per Unit

(2)

Static Budget:

Budgeted Units of

All Products Sold

× Budgeted Sales Mix

× Budgeted Contribution

Margin per Unit

(3)

Panel A:

Lower-tier

(11,000 × 0.30a) × $20

3,300 × $20

(11,000 × 0.40b) × $20

4,400 × $20

(10,000 × 0.40b) × $20

4,000 × $20

$66,000$88,000$80,000

$22,000U$8,000 F

Sales-mix varianceSales-quantity variance

$14,000 U

Sales-volume variance

Panel B:

Upper-tier

(11,000 × 0.70c) × $5

7,700 × $5

(11,000 × 0.60d) × $5

6,600 × $5

(10,000 × 0.60d) × $5

6,000 × $5

$38,500$33,000$30,000

$5,500 F$3,000 F

Sales-mix varianceSales-quantity variance

$8,500 F

Sales-volume variance

Panel C:

All Tickets

(Sum of Lower-tier and Upper-tier tickets)

$104,500e$121,000f$110,000g

$16,500 U$11,000 F

Total sales-mix varianceTotal sales-quantity variance

$5,500 U

Total sales-volume variance

F = favorable effect on operating income;  U = unfavorable effect on operating income.

Actual Sales Mix:

aLower-tier=3,300 ÷ 11,000=30%

cUpper-tier=7,700 ÷ 11,000=70%

e$66,000 + 38,500 = $104,500

Budgeted Sales Mix:

bLower-tier= 4,000 ÷ 10,000= 40%

dUpper-tier=6,000 ÷ 10,000= 60%

f $88,000 + $33,000 = $121,000

g $80,000 + $30,000 = $110,000

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